ARM (#ARM)

ARM (#ARM) Weekly Special Report based on 1 Lot Calculation

ARTIFICIAL INTELLIGENCE (AI):

• AI: ACCORDING TO THE INTERNATIONAL DATA CORPORATION, COMPANIES WILL SPEND $500 BILLION BY 2027, WHICH COULD SEE DEMAND FOR ARM’S CPU PRODUCTS: ARM designs chip architecture for all the major companies, and is the most dominant chip designer in the world. ARM designs chips for Apple, Amazon, Nvidia and AMD just to name a few.
• ARM IN THE CHIP INDUSTRY: As a chip designer, ARM plays an integral role in the artificial intelligence space, as all companies that develop and sell artificial intelligence chips are likely using a chip architecture designed by ARM. While ARM is more focused on Central Processing Units (CPU) chips, its dominance is colossal. According to reports, 30 billion chips worldwide used ARM technology.

THE COMPANY:

• ARM isn’t a chipmaker itself. Rather, the company is responsible for coming up with the “architectures” — or overall designs, including components and programming language instructions that other companies use to build chips. Today, 99% of smartphones use ARM processors.

EVENTS AND ANALYSIS:

• ARM GAMERS DEVELOPMENT CONFERENCE (GDC) (CONFIRMED March 18 – 22, 2024): The gamers development conference is a significant event for ARM as the company looks to continue improving its chip products. The company will be presenting various chip designs at the conference in collaboration with companies like Google and Tencent. If ARM releases any new chip designs, the market perception could be positive and could be bullish for the stock price.
• ARM RELEASES NEW AUTOMOTIVE TECHNOLOGY IN PARTNERSHIP WITH AMAZON, NVIDIA AND CADENCE DESIGN SYSTEMS: According to a statement from the company, the chip processors offered by ARM could speed up automotive development cycles by up to two years, while also cutting production costs for the manufacturer. The new product will assist in diversifying the company’s revenue stream and could continue to fuel further growth.

ARM AND NVIDIA:

• ARM AND NVIDIA, HISTORICALLY, MOVE IN THE SAME DIRECTION: Nvidia and ARM have historically exhibited strong correlation in price action, with a correlation coefficient of 0.74. This is primarily because both companies operate in the chip production space, as Nvidia depends on ARM for their chip designs. Therefore, as Nvidia experiences growth in demand for chips, and its price grows, ARM could grow as well.
• NVIDIA Q4 EARNINGS REPORT BEATS ACROSS THE BOARD, FURTHER EMPHASISNG STRONG CHIP DEMAND: Nvidia delivered a strong Q4 earnings report, beating Revenue, Earnings and forward guidance expectations. The company continues to cite strong chip demand and expects AI demand to remain robust.

PRICE ACTION:

• PRICE ACTION: Since the beginning of February 2024 alone ARM’s stock price went up 136% to its all-time high and is currently trading at around $130 which is a ~86% increase since the beginning of February 2024. The stock continues to remain elevated amidst robust chip demand. However, the price could decline.

ARM, March 14, 2024
Current Price: 130.00

Example of calculation based on weekly trend direction for 1 Lot¹

1. 1.00 lot is equivalent of 1 000 units
2. Calculations for exchange rate used as of 10:50 (GMT) 14/03/2024
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