Key Takeaways
Strong-performing ARM Holdings (ARM) announced on Friday that it has been added to the PHLX Semiconductor Sector Index (SOX) effective today.
The chip and software design company’s American depositary receipts (ADRs) have soared about 150% since they began trading on the Nasdaq last September, fueled by demand for its artificial intelligence (AI) products.
Just a year after becoming a public company, “Arm has continued to strengthen its position as the foundational computing platform at every technology touchpoint,” said CEO Rene Haas. Haas added that the addition to the SOX index “highlights the rapid growth we have experienced as we continue to diversify our solutions and expand into multiple markets.”
Analysts are bullish on Arm
Last week, Morgan Stanley named Arm “our new top pick,” with the analysts calling the company “a key part in the shift to edge AI, where AI data is placed closer to its source, rather than centralized in cloud computing facilities or data centers.” They noted that Apple’s (AAPL) A18 processor in the new iPhone 16 uses Arm’s architecture.
Also last week, Raymond James analyst Srini Pajuri began covering Arm with an “overweight” rating and a price target of $160. Pajuri also noted the importance of Arm’s connection to the iPhone 16, adding that the company is “well positioned to benefit from GenAI’s rapid growth in the cloud and edge.”
Arm ADRs were down 1% to $138.41 in late afternoon trading on Friday, but are up about 85% this year.
