Investing in ARM Holdings, now known as Arm Limited, may be a good idea for several reasons. The company was founded in 1990, it designs the processors that power most mobile devices and IoT devices in the market and is the leading provider of microprocessors in the mobile and embedded markets. ARM's processor designs are used in everything from smartphones and tablets to smart TVs and connected appliances. Arm's technology is also used in servers, storage devices, and other data center equipment.
Arm has a rich history of innovation and has been at the forefront of technology trends such as the mobile computing revolution, IoT and more recently the rise of edge computing. ARM Holdings was acquired by SoftBank in 2016, and since then, SoftBank has been actively working to expand the company's reach and capabilities. The company's strategy is to grow its processor business, while also investing in new technologies such as machine learning and artificial intelligence, which are expected to be key drivers of growth in the future. In 2020, Arm Limited was sold to NVIDIA, an American technology company that designs graphics processing units and system-on-a-chip units for the gaming and professional markets, which is planning to leverage the company's technology to expand into new markets such as data centers and autonomous vehicles. NVIDIA is now looking to IPO the business in the 2023 financial year.
- Dominant market position: Arm Limited designs the processors that power most mobile devices and IoT devices in the market and is the leading provider of microprocessors in the mobile and embedded markets.
- Strong financials: The company has a history of strong financial performance and has consistently reported revenue and earnings growth over the past several years.
- Diversified revenue streams: Arm's revenue comes from licensing its processor designs, as well as from royalty payments and technology services. This diversification helps to mitigate the risk of relying on a single source of revenue.
- High barriers to entry: The cost and complexity of developing new processor designs make it difficult for new competitors to enter the market, which helps to protect Arm's market position.
- Growing demand for IoT: As the Internet of Things (IoT) market continues to grow, the demand for the low-power, efficient processors that Arm designs is likely to increase. This could drive further growth for the company.
- Strong partnerships: Arm Limited has strong partnerships with companies such as Apple, Samsung, and Qualcomm which can help the company gain access to new markets and technologies.
Overall, investing in ARM Holdings could be a good idea for investors who are looking for a company with a dominant market position, strong financials, diversified revenue streams, high barriers to entry, and exposure to the growing IoT market. Also, with the acquisition of the company by NVIDIA, it could bring new opportunities for the company's technology to expand into new markets such as data centers and autonomous vehicles. ARM is now looking to float its shares via an IPO in 2023, given its prospects we have good reason to believe this will be a successful outcome for investors.
