An unsung hero in the artificial intelligence revolution is a relatively small U.K. chip design company called Arm Holdings. Both Nvidia and Broadcom, the top two AI-chip makers, use ARM cores at the center of their processors, as do a host of other chipmakers.
On Tuesday, Arm stock got a Relative Strength Rating upgrade that pushed its stock into an elite group. The IBD Methodology investors look for stocks to put on their watchlist with an 80 or higher RS Rating. ARM just cleared that benchmark with an upgrade from 79 to 82.
Arm designs chip "cores" and licenses them to makers of the microprocessors that run electronic devices. Chips based on ARM architecture are in video game players, smartphones, laptop computers, AI servers and a host of other devices.
Among its other key ratings ARM boasts a best-possible 99 EPS Rating, meaning ARM is in the top 1% of all companies for recent and long-term profit growth. It also has a terrific 96 Composite Rating. And its B+ Accumulation/Distribution Rating shows that funds are buying significantly more of its shares than selling.
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In terms of top and bottom line numbers, Arm has posted rising EPS growth over the last two quarters. Sales gains have also increased during the same period. Last quarter Arm posted a 53% rise in earnings to 55 cents per share on a 34% rise in revenue to $1.24 billion. The
While Arm is not near a proper buy point right now, see if it is able to form and break out from a proper base.
The company earns the No. 5 rank among its peers in the 39-stock Electronics-Semiconductor Fabless industry group. Broadcom is the No. 1 ranked stock in the group.
IBD's unique Relative Strength Rating measures share price movement with a 1 (worst) to 99 (best) score. The grade shows how a stock's price performance over the last 52 weeks stacks up against all the other stocks in our database.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
Please follow James DeTar on Twitter @JimDeTar
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