ARM

ARM designs processor architectures and licenses them to semiconductor companies who build chips for smartphones, data centers, and automotive applications. The company controls over 95% of the mobile processor market through its energy-efficient RISC architecture, collecting royalties on every chip sold by partners like Qualcomm, Apple, and MediaTek. The AI boom is driving demand for ARM-based processors in data centers, with companies like Amazon and Microsoft designing custom chips using ARM's latest Neoverse architecture. Trading at 100x forward earnings after going public in September 2023, the stock reflects massive AI expectations but offers limited upside at current levels. Revenue growth has been modest in recent quarters, making this valuation hard to justify despite the company's dominant market position.