Why Arm Stock Was Gaining Again Today
Key Points
Arm gained for the second day in response to Nvidia's CPU forecast.
Nvidia expects $20 billion in revenue this year from Vera CPU, which is licensed from Arm.
Arm may be the best way to get exposure to the boom in the CPU market.
- 10 stocks we like better than Arm Holdings ›
Shares of Arm Holdings (NASDAQ: ARM) were moving higher for the second day in a row as investors continued to react positively to Nvidia's affirmation of the CPU boom in its earnings call on Wednesday. The chip giant called out a $200 billion addressable market for CPUs and forecast $20 billion in revenue from its Vera CPU, which complements the new Rubin GPU.
As of 11:50 a.m. ET, the stock was up 3.1% on the news, after gaining as much as 5.6% earlier in the session. Other CPU stocks like Intel and AMD were up on the news as well.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Arm climbs again
There was no additional news out on the stock today, but Arm could be the biggest winner from Nvidia's forecast and emerging CPU business. Arm is a pure-play CPU stock. Currently, it makes its money by licensing CPUs and collecting royalties. Investors cheered when the company announced that it was making its own chip for the first time, launching the Arm AGI CPU. The company forecast the chip would bring in $15 billion in annual revenue by fiscal 2031, and called for $25 billion in total annual revenue.
The Vera CPU, which is licensed from Arm, could also be a significant opportunity for the company. Though its royalty rate has not been reported, a $20 billion product is likely to move the needle for Arm.
What's next for Arm
Arm is now trading at a sky-high valuation with a price-to-sales ratio of 65. However, that doesn't seem unreasonable considering where the company is headed and its competitive advantages in its CPU architecture, which is more power-efficient than the competing x86 platform that Intel and AMD use.
Arm's forecast for its own CPU growth is likely conservative, and the company shared recently that demand was more than double the available supply. High expectations are baked into Arm stock right now, but the demand is there. The stock could move even higher if sentiment toward CPUs continues to increase.
Should you buy stock in Arm Holdings right now?
Before you buy stock in Arm Holdings, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $481,589!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,345,714!*
Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 22, 2026.
Jeremy Bowman has positions in Advanced Micro Devices, Arm Holdings, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
