Nvidia Sells ARM Stake, Market Reacts Positively
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 18 2026
0mins
Should l Buy ARM?
Source: CNBC
- Nvidia Reduces ARM Stake: Nvidia gradually reduced its stake in ARM by the end of 2024, holding 1.1 million shares valued at $155.8 million; despite the sell-off, Nvidia's 20-year licensing agreement with ARM remains intact, indicating a long-term partnership.
- ARM Earnings Beat Expectations: ARM reported a 26% year-on-year increase in sales to $1.24 billion in its latest earnings report, surpassing analyst expectations and demonstrating strong momentum in AI projects, although its stock fell in after-hours trading, reflecting cautious market sentiment regarding future guidance.
- Positive Market Reaction: Following its Nasdaq debut, ARM's market cap is approximately $135 billion, and Nvidia's stake reduction did not dampen market confidence, as ARM shares rose 1.4% in premarket trading, indicating investor recognition of its long-term growth potential.
- Morgan Stanley Optimistic: Morgan Stanley has an “overweight” rating on ARM with a price target of $135, representing a premium of over 6% from Tuesday's closing price, reflecting a positive outlook on ARM's future performance, particularly in ongoing investments in AI.
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Analyst Views on ARM
Wall Street analysts forecast ARM stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 155.070
Low
120.00
Averages
160.58
High
201.00
Current: 155.070
Low
120.00
Averages
160.58
High
201.00
About ARM
Arm Holdings plc is engaged in operating a global computing platform. It architects, develops, and licenses high-performance and energy-efficient Arm compute platforms. The Company’s principal operations and activities are the licensing, marketing, research and development of central processing unit (CPU) design intellectual property (IP), graphics processors, system IP, market optimized platform IP, and associated software, tools and other related services. Its complementary products include GPU and NPU accelerators, interconnect, and others. Its primary product offerings are CPU products that address diverse performance, power, and cost requirements. It offers a family of GPU and NPU products providing efficient computing acceleration and an optimal visual experience across a wide range of devices. Its CPU, GPU, and System IP products integrated into a foundational compute platform optimized for a specific end market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Industry Dependency: Major tech players like Amazon, Apple, and Nvidia rely on Arm's instruction set architecture (ISA) for their critical chips, and while Arm's CEO emphasizes that the new CPU is additive to the market, its entry could still impact these companies significantly.
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- Investment Strategy: Given the recent volatility in Arm's stock, a dollar-cost averaging approach is recommended for investors to gradually accumulate shares at better prices during market instability, positioning themselves for potential future growth.
See More
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- Virtualization Expansion: The companies plan to expand virtualization capabilities to enable Arm-based software to run on IBM systems, thereby improving compatibility and deployment efficiency in mission-critical environments, addressing the need for flexible infrastructure in enterprises.
- Performance and Security Enhancement: This collaboration will focus on enhancing performance, security, and data handling capabilities while supporting hybrid and flexible infrastructure without major system changes, ensuring a smooth transition for businesses.
- Ecosystem Growth: The initiative builds on IBM's investments in AI hardware and aims to support long-term ecosystem growth by enabling broader software access and more flexible deployment options, promoting the integration of AI into core business operations.
See More
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