Is ARM a good stock to buy? We came across a bullish thesis on Arm Holdings plc on Rijnberk InvestInsights’s Substack by Daan | InvestInsights. In this article, we will summarize the bulls’ thesis on ARM. Arm Holdings plc’s share was trading at $175.49 as of April 21st ARM’s trailing and forward P/E were 233.47 and 85.47 respectively according to Yahoo Finance.
Arm Holdings plc is a dominant force in the semiconductor industry, uniquely positioned as a leading provider of chip architecture and intellectual property rather than a manufacturer. The company licenses its designs to over 260 partners, enabling billions of devices—from smartphones to data centers—to run on its technology, with nearly all smartphones globally powered by Arm-based processors.
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Its success stems from its early focus on reduced instruction set computing (RISC), delivering superior energy efficiency compared to legacy x86 architectures from Intel and AMD. This advantage, combined with a deeply entrenched software ecosystem and decades of developer adoption, creates a formidable moat, making Arm one of only two viable global computing architectures. Its capital-light model, driven by upfront licensing fees and recurring royalties on chip shipments, yields high-margin, scalable revenues tied to global electronics demand.
The investment case is further strengthened by strong financial momentum, with recent quarterly revenue growing 26% year-over-year, driven by robust royalty growth in smartphones and data centers, alongside increasing adoption of higher-value compute subsystems. While operating margins face near-term pressure due to elevated R&D investments and stock-based compensation, cash flow generation remains strong, and the balance sheet is solid with a net cash position.
A pivotal shift came with the launch of its first in-house data center CPU, marking an expansion beyond its traditional IP-only model. This move significantly increases Arm’s addressable market, allowing it to capture full chip economics in a rapidly growing CPU market expected to exceed $100 billion by decade-end. With superior performance-per-watt and strong ecosystem backing, this strategic evolution positions Arm for sustained high growth, with management targeting substantial revenue and earnings expansion through 2031, reinforcing its long-term investment appeal.
Previously, we covered a bullish thesis on Arm Holdings plc (ARM) by Stock Analysis Compilation in December 2024, which highlighted the company’s royalty-driven growth, Armv9 adoption, and diversification beyond mobile into cloud and automotive markets. ARM’s stock price has appreciated by approximately 32.86% since our coverage. Daan | InvestInsights shares a similar view but emphasizes on Arm’s architectural moat and expansion into in-house data center CPUs.