Arm Holdings (ARM +2.98%) designs, develops, and licenses high-performance, low-cost, and energy-efficient CPU (central processing unit) products. Many of the world's top semiconductor companies rely on its products, which are in nearly every single smartphone in the world.
NASDAQ: ARM
Key Data Points
The company's massive and growing total addressable market (TAM) opportunity is powering that enthusiasm. Arm believes its opportunity includes all chips that contain a processor, like those found in smartphones, PCs, digital TVs, servers, vehicles, and networking equipment. The company estimated its TAM will grow to about $246.5 billion by the end of 2025. The company sees catalysts like artificial intelligence (AI), automotive, cloud infrastructure, and the Internet of Things (IoT) driving its future growth and making it less dependent on the smartphone market it currently dominates.
Arm's growth prospects might have you interested in buying its stock. Here's a step-by-step guide on how to purchase the semiconductor stock.
Cloud Computing
How to buy Arm stock
People who want to buy Arm Holdings stock will need to do a few things before becoming a shareholder. Here's a step-by-step guide to investing in the semiconductor company.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Semiconductor
Is Arm profitable?
Analyzing a company's profitability is an essential aspect of investment research. Profit growth has typically been the greatest driver of stock price performance over the long term. With that in mind, here's a closer look at Arm's profitability.
Arm is a very profitable company. In the third quarter of its 2025 fiscal year Arm reported $983 million of revenue on record royalty revenue and continued strong growth in its license revenue. Meanwhile, the semiconductor company generated $252 million of net income, a 190% increase from the prior-year period.
The company is also producing lots of cash; its free cash flow in the third quarter was $349 million (and $573 million over the trailing 12-month period). That enabled Arm to end the period with nearly $2.7 billion of cash, cash equivalents, and short-term investments on its balance sheet.
The company's growing revenue and improving profitability are the key to its ability to grow shareholder value over the longer term.
Does Arm pay a dividend?
Arm didn't pay dividends as of early 2025. The company retains any earnings from its business to support its long-term growth.
ETFs with exposure to Arm
Many investors prefer to passively invest in stocks instead of actively investing by directly owning shares of specific companies. Exchange-traded funds (ETFs) are one of the most common passive investments.
Exchange-Traded Fund (ETF)
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Will Arm stock split?
Arm Holdings didn't have an upcoming stock split on the calendar as of early 2025, but the company has only been public for a short time. It likely won't complete a stock split anytime soon. While shares have gained ground since the IPO (they traded at more than $100 a share in early 2025), that was still an accessible level for most investors (and well below its 2024 peak of almost $190 a share). Shares would have to surge significantly above their IPO price before Arm would need to consider a stock split.
The bottom line on Arm
Arm believes there's a massive and growing market for the chips it designs, positioning the company to deliver accelerated revenue and profit growth in the coming years. This growth catalyst could enable the company to more than grow into its lofty valuation.
However, investors are paying a high premium for that growth potential, which might not develop. Potential investors need to understand the risks before buying shares of Arm.
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