Jim Cramer took to X with a one-line verdict on Arm Holdings PLC (NASDAQ:ARM) with a blunt assessment: "ARM-business incredibly strong." Short but loaded. Already powering nearly every smartphone chip on the planet, ARM's energy-efficient designs could make it the toll collector of the AI boom.
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The Nvidia Playbook, Reloaded
ARM, which went public in September 2023, doesn't sell chips directly — it licenses designs. That gives the SoftBank-backed firm a capital-light, margin-rich business model. If the industry's pivot to AI accelerators and edge computing continues to expand, the company becomes indispensable to chipmakers and hyperscalers alike.
It's the same "picks-and-shovels" logic that helped Nvidia Corp (NASDAQ:NVDA) dominate GPUs — except ARM doesn't face the same supply chain bottlenecks.
Cramer's bullish remark effectively frames ARM as the next infrastructure play in AI. Nvidia has already seen a $1 trillion rerating thanks to data center demand. If the licensing moat continues to capture growth, the stock could break out of its "smartphone IP" narrative and reprice toward the AI infrastructure tier.
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Retail's AI Darling In The Making?
Retail investors seeking the "next Nvidia" often pursue smaller-cap, speculative AI names. ARM, in contrast, offers a unique middle ground: global brand recognition, embedded dominance, and explosive upside if AI adoption scales. That blend could make it the next retail obsession — the kind Cramer loves to spotlight.
Of course, the risk lies in execution. Cambridge, U.K.-based ARM still needs to prove that AI revenue streams can eclipse its mobile DNA. However, if Cramer's call proves true, the Rene Haas-led company could soon be viewed less as an IP licensor and more like a cloud-era toll collector.
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