By Zacks Equity Research
Publication Date: 2026-03-26 07:00:00
Chicago, IL – March 26, 2026 – Today, Zacks Investment Ideas feature highlights Arm Holdings ARM, NVIDIA NVDA, Advanced Micro Devices AMD, Apple AAPL, Qualcomm QCOM and Meta Platforms META.
Why ARM’s New AI Chips Are a Game-Changer
What Does Arm Holdings Do?
Zacks Rank #3 (Hold) stock Arm Holdings is a British software design company that is a foundational architect for the modern technological era. Unlike traditional semiconductor stocks like NVIDIA or Advanced Micro Devices, which design physical chips, ARM’s business focuses on designing the blueprints (processor architecture).
Then, rather than producing the chips themselves, ARM licenses its architecture to major technology companies, including NVIDIA, Apple and Qualcomm. ARM’s RISC-based (Reduced Instruction Set Computing) processor is known for producing some of the most energy-efficient technology and is used in most of the world’s most popular consumer electronic devices, such as the Apple iPhone.
ARM Holdings: A High Margin, Asset-Light Business
Because of ARM’s unique, asset light business model, the company enjoys a high-margin business. ARM collects upfront fees and royalties on every chip containing its technology. In other words, ARM has the holy grail for a fundamentally strong company – low costs and a recurring revenue stream that is independent of manufacturing expenses. ARM’s 97.5% gross margin (total revenue – cost of goods sold) is exceptional.
Meanwhile, the…