By Keith Speights
Publication Date: 2026-10-16 08:44:00
Many Nvidia (NVDA -1.84%) investors warily monitor Advanced Micro Devices (AMD -1.50%) and Broadcom (AVGO -0.56%). And for good reason. AMD competes directly with Nvidia. Broadcom co-develops custom silicon for companies such as Alphabet‘s (GOOG +0.37%) (GOOGL +0.45%) Google to help them reduce their dependence on Nvidia.
However, there’s another chip designer that Nvidia investors should be watching closely. This company isn’t even really a rival to Nvidia. But without it, Nvidia is unlikely to be successful going forward.
Image source: Getty Images.
A lucrative Nvidia connection
I won’t try to build the suspense: The chipmaker I’m referring to is Arm Holdings (ARM +2.85%). In some ways, Arm ranks as the most important semiconductor stock other than Nvidia itself.
Arm’s business model makes it unique from AMD, Broadcom, and other chipmakers. The company licenses its architecture, then collects royalties on every chip manufactured using its designs. Some have described the ongoing intense competition between semiconductor makers as the “chip wars.” By that analogy, Arm is the top weapons supplier to many major combatants.
Nvidia is a key customer for ARM. The Vera CPUs built to run agentic artificial intelligence (AI) are built on Arm’s architecture. When Nvidia recently projected a stunning $20 billion in Vera CPU sales by the end of the current fiscal year, it was understandably great news for Arm.
Arm has already made a huge inroad into the data center CPU market,…