Why ARM Holdings Is Poised to Underperform


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, microprocessor designer ARM Holdings has received a distressing two-star ranking.

With that in mind, let's take a closer look at ARM and see what CAPS investors are saying about the stock right now.


Headquarters (Founded)

Cambridge, England (1990)

Market Cap

$17.1 billion



Trailing-12-Month Revenue

$884.9 million


CEO D. Warren East (since 2001)

Return on Equity (Average, Past 3 Years)



$710.9 million / $165.6 million

Dividend Yield



MIPS Technologies


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 9% of the 892 members who have rated ARM believe the stock will underperform the S&P 500 going forward.

Earlier this year, one of those Fools, bradyamanaka, succinctly summed up the ARM bear case for our community:

Intel is moving into the smartphone/tablet arena. These guys haven't been first to either the computer or the server market, but when they get there, they win. The same thing is going to happen in the smartphone/tablet arena. Intel spends more on R+D than [ARM] grosses in revenue in a year. ... They consequently have much better process management than any of the foundries and this is going to make a large impact in the smartphone/tablet market ... next year. This impact will be larger than any impact that [ARM] may have on servers/PC market.

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The article Why ARM Holdings Is Poised to Underperform originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Intel. Motley Fool newsletter services recommend Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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