ARM
ARM Holdings
Semiconductors
★ Quality 67/100Price today
$286.48
what the market pays
Worth
$56.00
calculated cycle value
Price is 412% above its value
charlieapp.co
The brain inside every smartphone
99% of the phones in the world use chips designed under ARM licences. Apple, Qualcomm, Samsung — all of them depend on its architecture.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
How many times the cash flow
Semiconductors · vs 11 peers
You pay 199.8x times this business's cash flow; its sector median is 58.2x.
81% above what Charlie thinks it's worth (37.4x) — you're overpaying, sector or no sector.
Why Overvalued?
The model estimates an intrinsic value of $56.00 per share. Today's price of $286.48 is 80% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 412% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $53.20.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$44.80
-20% off Value
🟡 Discounted
≤$53.20
-5% off Value
🔴 Today
$286.48
-81% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
ARM is the master blueprint: every chip is built on its design.
ARM designs the chip architecture that powers 99% of the world's smartphones. It manufactures nothing: it licenses the design and collects royalties on every chip sold with its IP, between 1% and 5% of the chip's price.
Forty years of ecosystem built on top of ARM. Switching architectures means rewriting software, redesigning silicon, and breaking compatibility with billions of devices. That's why Apple, Qualcomm, and Nvidia pay without complaint.
Revenue history
From $2.7B to $4.7B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $4.9B · FY2026
Of every $100 in sales, $82 goes to costs and operations; $18 is left as net profit (18% margin).
Catalysts and risks
Armv9 already accounts for ~25% of royalties at rates 2x higher than v8.
Compute Subsystems (CSS) accelerating adoption in datacenter and automotive.
Penetration in AI servers: Nvidia Grace, AWS Graviton, Microsoft Cobalt.
Trades at 106x FCF. The price prices in perfection for a decade.
SoftBank holds ~90% of the equity. Any secondary sale pressures the price.
RISC-V gaining ground in IoT and embedded, where ARM collects higher royalties.
Charlie's note
“Spectacular business, ridiculous price. Paying 106x cash flow for something growing 24% assumes nothing goes wrong for ten years — I'd rather wait for the market to remember gravity.”
Analysis · May 2026
So when would be a good price for ARM Holdings?
By our calculation, not yet. We will email you the day it drops to $53.20 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.