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$ARM$166.72 ▼13.1%
Arm Holdings plc
WHAT THEY DO
Arm designs CPU cores and related intellectual property (instruction sets, graphics, AI accelerators) that it licenses to chipmakers like Apple, Qualcomm, Nvidia and MediaTek, plus a per-chip royalty on every unit shipped. It doesn't make or sell chips itself; it earns licensing fees and royalties.
💎 CONVERGENCE PLAY — in 3 themes
Edge AIAI InferenceLicensing/Royalty Model
PRICE
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REVENUE MIX
Royalty62%
Licensing35%
Other3%
COST
COGS2%
R&D55%
SG&A35%
Op Margin14%
FINANCIAL HEALTH
Reported through Sep 30, 2026
Figures are trailing twelve months (TTM) unless marked otherwise.
REVENUE
$5.5B
Growth
27%
QTR YOY
Gross M.
97%
P/E
191.6
EV/EBITDA
0
Net M.
17%
FCF M.
21%
D/E
0
LATEST QTR
Op M.
14%
PLUG INTO YOUR DCF
Historical growth
19.4%
Analyst 5y growth
—
Forward P/E
54.5
PEG ratio
1.60
Trailing EPS
$0.90
Forward EPS
$3.10
Multiple compressing
Forward P/E is lower than trailing — earnings are expected to grow into the price.
CAPEX & R&D — LAST 0 FISCAL YEARS (SEC FILINGS)
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TAM
SIZE
$250B by 2030
CAGR
12%
Arm's addressable market spans smartphone, data center, automotive and IoT compute, with AI inference shifting silicon demand toward Arm-based designs. Data center CPU share gains and edge AI could expand royalty pools materially, but the TAM is contested by x86, RISC-V and in-house designs.
RISK ASSESSMENT
HIGValuation: 272x trailing P/E and 236x EV/EBITDA leave no room for execution error; any growth deceleration could trigger severe multiple compression.
MEDCustomer concentration and vertical integration risk — large licensees like Apple and Qualcomm are developing in-house or RISC-V alternatives, and Arm's China JV adds geopolitical/control complexity.
LOWRoyalty rate mix shift toward lower-priced edge/IoT chips could dilute blended royalty economics even as unit volumes grow.
🐂 BULL
Arm is the de facto instruction-set standard for mobile and increasingly for data center and edge AI, giving it a durable royalty annuity on nearly every smartphone and a growing slice of cloud CPUs. Licensing momentum in AI accelerators and automotive could compound revenue at 20%+ for years.
🐻 BEAR
At 272x earnings the stock already discounts flawless multi-year execution, while operating margin of just 8% shows heavy R&D spend and limited near-term profit leverage. Rising RISC-V and in-house designs threaten the licensing moat, and any AI capex digestion would hit the multiple hard.
EARNINGS
EPS · Q1 FY2026
Beat ✓
REVENUE
Beat ✓
MANAGEMENT TONE
BearishBullish
🔗 IMPACT ON YOUR THESIS
Data center CPU share gains via Arm-based server silicon
Watch→On Track
Management cited accelerating hyperscaler adoption of Arm-based server CPUs.
Edge AI inference driving higher royalty rates per device
Watch→Watch
Royalty growth solid but mix still skewed to lower-rate mobile.
Margin expansion from operating leverage
Watch→Watch
Operating margin 8% shows R&D investment still outpacing revenue leverage.
AI-powered data, computed by TreasureX · May contain inaccuracies
⚠️
All values, scores, and figures here are computed from your own assumptions and public data, for educational purposes only. This is not investment advice — TreasureX does not recommend buying or selling any security. Results change with your inputs. Please do your own research and use your own judgement before making any investment decision.