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An Artificial Intelligence (AI) Stock Some Investors See as the "Next Nvidia" Could Surge 130%, According to a Wall Street Analyst

The Motley Fool
Summary
Nutrition label

85% Informative

Some investors have shifted focus to Arm Holdings (NASDAQ: ARM) in the hopes of finding the "next Nvidia" Arm designs central processing unit ( CPU ) architectures and licenses the intellectual property ( IP ) to other companies, which use the IP to build custom chips.

Morgan Stanley believes Arm is particularly well-positioned to monetize edge AI , meaning AI workloads run on edge devices.

Arm has an attractive business model, and its strong presence in mobile devices leaves the company with substantial growth prospects.

But I doubt the stock will deliver triple-digit returns over the next year .

Company guidance implies 22% earnings growth in fiscal 2025 (ends March 2025 ), which actually falls short of the consensus.

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https://api.fool.com/infotron/infotrack/click?apikey=35527423-a535-4519-a07f-20014582e03e&impression=7bd901be-3a61-4059-9a95-86657f6217c5&url=https%3A%2F%2Fwww.fool.com%2Fmms%2Fmark%2Fe-foolcom-sa-bbn-dyn%3Faid%3D8867%26source%3Disaeditxt0010895%26ftm_cam%3Dsa-bbn-evergreen%26ftm_pit%3D13885%26ftm_veh%3Darticle_pitch_feed_yahoo%26company%3DArm%2520Holdings&utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=a9ba2336-1f2a-43a5-a3ce-246f1f1242bdhttps://www.fool.com/legal/fool-disclosure-policy/https://www.fool.com/investing/2024/08/02/ai-stock-next-nvidia-could-surge-130-wall-street/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=a9ba2336-1f2a-43a5-a3ce-246f1f1242bdhttps://api.fool.com/infotron/infotrack/click?apikey=35527423-a535-4519-a07f-20014582e03e&impression=7bd901be-3a61-4059-9a95-86657f6217c5&url=https%3A%2F%2Fwww.fool.com%2Fmms%2Fmark%2Fe-foolcom-sa-bbn-dyn%3Faid%3D8867%26amp%253Bsource%3Disaeditxt0010895%26ftm_cam%3Dsa-bbn-evergreen%26ftm_veh%3Darticle_pitch_feed_yahoo%26ftm_pit%3D13885&utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=a9ba2336-1f2a-43a5-a3ce-246f1f1242bdhttps://www.fool.com/author/20339/https://www.fool.com/investing/2024/07/04/apples-new-artificial-intelligence-ai-features-cou/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=a9ba2336-1f2a-43a5-a3ce-246f1f1242bdhttps://www.fool.com/terms/c/cpu/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=a9ba2336-1f2a-43a5-a3ce-246f1f1242bd

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