What's Going On With Arm Holdings Stock?

Arm Holdings Plc ARM shares are trading higher Thursday after Nvidia Corporation NVDA posted blockbuster fourth-quarter earnings after the market close Wednesday. 

The Details:

Nvidia reported non-GAAP earnings per share of $5.16, beating the estimate of $4.64 and revenue of $22.1 billion, also beating the Street estimate of $20.62 billion. Revenue in the fourth quarter was up 22% from the third quarter and up 265% year-over-year.

Nvidia issued guidance above estimates due to increasing demand for AI-related technologies across all sectors. 

"Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations," said Nvidia CEO Jensen Huang. 

Shares of several semiconductor stocks, including Arm, are trading higher with increased excitement surrounding the artificial intelligence revolution. 

Nvidia recently revealed a $147.3 million investment in Arm Holdings. The company had previously tried to acquire Arm in a $80 billion deal that hit antitrust hurdles and ultimately fell through.

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ARM Stock Forecast In 2030:

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For ARM Holdings ARM, over the past 5 years, it's annualized stock performance is 14.18%, and if you assume that trend continues for another 5 years, you can expect a stock to trade at $263.39.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

ARM Price Action: According to Benzinga Pro, Arm Holdings shares are up7.3% at $132.44 at the time of publication.

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