Why Arm Holdings Stock Popped Today

Why Arm Holdings Stock Popped Today

Rich Smith, The Motley Fool

Thu, August 13, 2026 at 8:23 PM GMT+3 2 min read

Arm Holdings (NASDAQ: ARM) stock jumped 4% through 12:45 p.m. ET Thursday. You can thank the friendly bankers at Bank of America for that.

In a note out this morning discussing the semiconductor market, BofA analyst Vivek Arya revised his forecast for growth in CPU sales. He named several stocks that may benefit from his projections -- but perhaps none more than Arm.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

Bank of America CPU forecast

Arya had previously forecast 2030 CPU sales of $170 billion, but he now thinks this estimate too conservative. Seeing how artificial intelligence is evolving and increasingly leaning toward agentic AI, Arya now thinks the CPU market could hit $210 billion in sales by 2030.

That's nearly five times the size of the CPU market in 2025, and implies annualized sales growth of 36% for the semiconductor industry over the next 4-5 years. And here's the thing: As StreetInsider.com reports today, Arya thinks Arm will gain market share faster than any other company over this period -- which means Arm sales should grow faster than 36% annually over the next 4-5 years!

What it means for Arm stock

Arm designs energy-efficient CPU architectures for other companies to manufacture, generating ultra-high-margin licensing and royalty revenue from its services. Analysts, on average, were already projecting nearly 35% annual earnings growth for Arm over the next five years, but if Arya is right in his projections, that's just the baseline.

Ultra-high profit margins (of as much as 97.5% last year, according to data from S&P Global Market Intelligence), plus 36% overall growth in CPU shales, should mean even faster profit growth for Arm. Granted, at a price-to-earnings ratio of 278, Arm seems a very expensive stock today.

If BofA's got its math right, though, Arm stock might actually be worth it.

Should you buy stock in Arm Holdings right now?

Before you buy stock in Arm Holdings, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,375,393!*

Now, it's worth noting Stock Advisor's total average return is 964% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of August 13, 2026.

Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Arm Holdings. The Motley Fool has a disclosure policy.

Why Arm Holdings Stock Popped Today was originally published by The Motley Fool