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Does Nvidia Know Something Wall Street Doesn't? It Sold 2 AI Stocks Analysts Say Can Soar 65% and 110%.
ARMArm plc(ARM) The Motley Fool·2025-03-02 08:42

Group 1: Nvidia's Stock Sales - Nvidia sold two artificial intelligence stocks in Q4, reducing its stake in Arm Holdings by 44% and exiting its position in SoundHound AI [2] - Despite the sale, Arm remains Nvidia's largest holding, accounting for 45% of its portfolio, indicating continued confidence in Arm [8] Group 2: Arm Holdings Overview - Arm designs and licenses CPUs and subsystems for various markets, including mobile and data centers, and provides software development tools for AI workloads [3] - Arm's hardware is present in 99% of smartphones and 67% of other mobile devices, with significant market share growth in data centers [4] - In Q3 FY2025, Arm reported a 19% revenue increase to 983millionanda26983 million and a 26% rise in non-GAAP net income to 0.39 per diluted share [5] - Strong growth in royalty revenue and demand for compute subsystems were noted, with Arm gaining share in the data center market [6] - Analysts expect Arm's adjusted earnings to grow at 32% annually through FY2026, with a current valuation of 91 times adjusted earnings [7] Group 3: SoundHound AI Overview - SoundHound provides voice AI solutions for various industries, including automotive and customer service, with notable clients like Chipotle and Qualcomm [9] - The company has been collecting voice AI data for over 15 years and claims its technology outperforms competitors in speed and accuracy [10] - In Q4, SoundHound's revenue increased by 101% to 34million,butitreportedawideningadjustedlossof34 million, but it reported a widening adjusted loss of 0.05 per diluted share and negative cash from operations of 108million[12]−SoundHound′sstocktradesatahighvaluationof49timessales,significantlyaboveitsthree−yearaverageof22timessales[13]Group4:AnalystPriceTargets−TimothyArcuriatUBSsetatargetpriceof108 million [12] - SoundHound's stock trades at a high valuation of 49 times sales, significantly above its three-year average of 22 times sales [13] Group 4: Analyst Price Targets - Timothy Arcuri at UBS set a target price of 215 for Arm, implying a 65% upside from its current price of 130[11]−DanIvesatWedbushsetatargetpriceof130 [11] - Dan Ives at Wedbush set a target price of 22 for SoundHound, indicating a 110% upside from its current price of $10.50 [11]