2024-05-17 06:14:14 ET
Summary
- Arm Holdings is a semiconductor company known for its Acorn RISC Machine architecture, dominating the smartphone CPU market.
- Having dominance in the smartphone CPU market allows the company to enjoy sky-high gross margin, which is aggressively reinvested back into business.
- ARM has significantly improved its revenue mix in recent years and has robust potential to disrupt a huge data center industry with its ARM architecture for CPUs.
- The valuation is sky-high, but not unrealistic.
Investment thesis
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Arm Holdings: High Valuation Is Deserved