SoftBank Group subsidiary Arm Holdings (NASDAQ:ARM) CEO Rene Haas believes that analysts have underestimated the pace at which artificial intelligence is advancing.
What Happened: Haas made these comments during an interview with Yahoo Finance's Market Domination Overtime on Monday. He pointed out that AI will significantly change people's lives and that 70% of the world's devices use Arm chips, positioning the company well in the AI race.
He said, "I think respectfully, the analysts maybe didn't quite understand or have an appreciation at the pace of which things were moving," referring to the rapid growth of AI.
Haas also highlighted the potential of AI to drive growth in the smartphone and Arm sectors, given that most devices already use Arm chips and software.
Why It Matters: Arm Holdings was recently added to the Nasdaq 100, marking a significant milestone for the British semiconductor firm. Shares of Arm have surged nearly 140% since its public debut in September. Haas expressed pride in the company's inclusion in the Nasdaq 100, describing it as a "very, very cool day" for both employees and the company.
The rapid rise of Arm Holdings in the AI sector is not an isolated event. In May, Arm announced plans to launch a new AI chip division, with the first products expected next year. This move is part of SoftBank Group's $64 billion strategy to transform into an AI powerhouse. The new division aims to develop a prototype by spring 2025 and commence mass production in the fall of 2025.
In the same month, analysts predicted that Arm Holdings could challenge industry giants like Qualcomm Inc (NASDAQ:QCOM), Intel Corp (NASDAQ:INTC), and Advanced Micro Devices, Inc (NASDAQ:AMD) in the AI chip market. Despite some concerns over a potential slowdown in AI spending, Arm's fiscal 2025 revenue guidance remains strong.
However, the company's journey has not been without challenges. A legal dispute with Qualcomm reportedly threatens to disrupt the shipment of new AI-powered laptops. This ongoing battle has raised concerns about the future of AI PC shipments.
Price Action: Arm Holdings Plc's stock closed at $151.07 on Monday, down 5.76%. In after-hours trading, the stock declined further by 0.97%. Year to date, Arm Holdings' stock has seen substantial growth, rising by 119.20%, according to the data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote