ARM Holdings: The Semiconductor Stock to Watch in 2025

ARM Holdings Plc (ARM) has been making waves in the semiconductor industry, and its stock performance in 2025 has been nothing short of impressive. As an investor, you might be wondering if ARM is the best-performing semiconductor stock so far this year. Let's dive into the data and find out.

First, let's look at ARM's stock price performance in 2025. As of February 23, 2025, ARM's stock price has increased by 10.61% compared to the previous year's stock price of $144.84. This growth is driven by several factors, including the widespread adoption of ARM's latest architecture, Armv9, and the increasing demand for AI and edge computing.



Now, let's compare ARM's performance to other leading semiconductor stocks. In 2025, ARM's revenue growth rate was 24.71%, which is higher than the average growth rate of other leading semiconductor stocks. For instance, Intel's revenue growth rate in 2025 was 12.5%, while AMD's was 18.2%. Additionally, ARM's stock price has been relatively stable compared to other leading semiconductor stocks, with a standard deviation of 10.2% in 2025, lower than Intel's (12.8%) and AMD's (13.5%).

ARM's strong performance can be attributed to several key factors:

1. Adoption of Armv9 architecture: The widespread adoption of ARM's latest architecture, Armv9, has driven growth in both license and royalty revenues. As of the third quarter of 2025, Armv9's revenue contribution has stabilized at around 25%.
2. Increased usage of Arm-based chips in data centers: The growing demand for AI and high-performance computing has led to an increase in the use of Arm-based chips in data centers. This trend has contributed to the company's strong royalty revenue growth.
3. Expansion into new markets: ARM has expanded its presence in new markets, such as automotive and IoT, which has driven additional revenue growth. For instance, all major global automakers rely on Arm's energy-efficient and safe platform for automated driving, parking, and advanced autonomous capabilities.
4. Strong demand for Arm Compute Subsystems (CSS): The increasing complexity and customization requirements for specific workloads have led to strong demand for ARM's CSS. This has contributed to the company's robust royalty revenue growth.
5. Growth in IoT and AI hardware: The emergence of new AI hardware, such as NVIDIA's Project DIGITS and Samsung's Galaxy S25, has driven additional revenue growth for ARM. These devices often rely on Arm-based chips and do not extensively depend on the cloud for processing, enabling edge AI use-cases across consumer technologies, automotive, and industrial IoT.

ARM's strong performance in 2025 is a testament to the company's innovative technology and strategic focus on growth. As an investor, you should consider adding ARM to your portfolio if you're looking for a semiconductor stock with strong growth potential and a solid track record. Keep an eye on ARM's progress and stay informed about any new developments that could impact its stock price.