Is Arm Stock a Buy?
Arm Holdings performs a crucial role in the semiconductor industry, with many top companies depending on its products. It went public to much fanfare in 2023 and has since outperformed the wider market. But is Arm stock a buy in 2025?
In this article, we’ll examine Arm in detail, see what the analysts are forecasting for the share price and explain how to buy Arm shares.
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
Table of Contents
What Does Arm Holdings Do?
Arm Holdings is a semiconductor company; however, its business model is fairly distinct from other players in this space.
Arm designs and develops Central Processing Units (CPUs). It then licenses these designs to other semiconductor companies, which uses Arm architecture to manufacture their own chips.
Consequently, Arm generates its revenue from these licensing agreements and from royalties it earns when products containing its designs are sold.
Is Arm a Good Stock to Buy?
Before deciding whether or not to invest in Arm, it is important to conduct your own research into the pros and cons of owning Arm shares.
Since the Arm IPO (Initial Public Offering) in 2023, its shares have performed well compared to the wider market, benefitting from market bullishness in Artificial Intelligence (AI) stocks. But is arm stock a buy in 2025?
Opportunities for Growth
Arm’s chip designs can already be found in 99% of smart phones on the planet, a market which has shown signs of slowing down in recent years. However, there remain other growth opportunities for the chip designer.
As demand for AI services soars, tech companies are investing heavily to keep up. In 2025, Meta Platforms, Amazon, Alphabet and Microsoft intend to spend more than $300 billion on AI technology and data centre buildouts. Although it should be noted these spending figures are forecasts.
These data centres are set to drive enormous electricity consumption in the coming years. Between now and 2030, they are forecast to account for almost half of the growth in electricity demand in the US.
Arm’s CPU architecture is often regarded as being more energy-efficient than competing designs, which could make it an ideal companion for these energy hungry data centres.
Plans to Launch its Own Chip
Furthermore, at the beginning of the year, Arm announced that it planned to launch its own chip, a major departure from its traditional business model which relies on licensing agreements and royalties.
These chips are expected to be designed specifically for large data centres and be customisable for specific clients. Meta Platforms was secured as one of its first customers.
Whilst this may represent an opportunity for future growth, the shift from designing and licensing CPU architecture into building and selling its own chips could bring the company into direct competition with its customers.
It’s Trading at an Expensive Valuation
Nevertheless, these growth opportunities appear to be largely priced into the Arm share price.
At the time of writing, 28 July 2025, Arm stock trades at 215 times trailing earnings. In terms of forward price to earnings, Arm is currently trading at around 90 times forecast earnings.
At this level, Arm is considerably more expensive than the wider market, which is certainly something to bear in mind before buying any shares.
Arm Stock Forecast
So, what do the analysts think about investing in Arm?
According to 22 Wall Street analysts, polled by TipRanks, offering a 12-month Arm share price forecast over the past 3 months:
- Buy Ratings: 16
- Hold Ratings: 5
- Sell Ratings: 1
- Average Price Target: $162.41
- High Price Target: $210.00
- Low Price Target: $95.00
How to Buy Arm Shares in 4 Steps
If you’re interested in buying shares in Arm Holdings with Admiral Markets, you can follow these 4 steps:
- Register for an Invest.MT5 account and log in to the Dashboard.
- Find your account details in the account section and click ‘Invest’ to open the Admiral Markets Platform.
- Search for Arm stock and click the symbol to open the instrument page.
- Enter the number of Arm shares you want to purchase and click ‘Place order’ to send your order to the market!
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Frequently Asked Questions
What does Arm stock do?
Arm designs central processing units (CPUs). However, rather than manufacturing them itself, it licences its design to other companies who use these designs to manufacture their own processors.
When did Arm go public?
Arm Holdings went public on 14 September 2023, listing on the Nasdaq at a price of $51 per share.
Who owns Arm stock?
As of 20 May 2025, SoftBank Group owns approximately 87.1% of Arm Holdings’ outstanding shares.
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