NEW YORK - Nasdaq announced on Thursday that Arm Holdings plc (NASDAQ: NASDAQ:ARM) will be added to several of its key indexes, including the Nasdaq-100 Index® (NASDAQ: NDX®), starting June 24, 2024. The British semiconductor and software design company is set to replace Sirius XM Holdings Inc. (NASDAQ: NASDAQ:SIRI) in the Nasdaq-100 Index® and the Nasdaq-100 Equal Weighted™ Index.
The inclusion of Arm Holdings in the Nasdaq-100 Tech Sector™ Index (NASDAQ: NDXT™) and other related technology indexes underscores the company's growing influence in the tech sector. With its addition to the Nasdaq-100 Technology Sector Market-Cap Weighted™ Index (NASDAQ: NDXTMC™) and the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted™ Index (NASDAQ: NDXT10™), Arm Holdings is recognized for its market capitalization and adjusted market capitalization in the technology sector.
Sirius XM, on the other hand, will be removed from several Nasdaq indexes, including the Nasdaq-100 Ex-Tech Sector™ Index (NASDAQ: NDXX™), the Nasdaq-100 ESG Index (NASDAQ: NDXESG™), the Nasdaq-100 Sustainable ESG Select Index (NASDAQ: NDXSES™), and the Nasdaq-100 Target (NYSE:TGT) 25 Index® (NASDAQ: NDXT25™) on the same date.
Nasdaq is a prominent global technology company that provides a variety of services, including data, analytics, software, and exchange capabilities, to various financial market participants. The company aims to enhance liquidity, transparency, and integrity in the global economy through its platforms.
The changes to the indexes reflect Nasdaq's periodic updating of its index components, which is part of its ongoing effort to ensure that its indexes accurately represent the performance of the leading companies in the technology sector and the broader market. The addition of Arm Holdings to the Nasdaq-100 Index® is based on the company's market capitalization and is indicative of its importance in the tech industry.
In other recent news, Arm Holdings has been making significant strides in the technology sector. The company recently reported record revenue growth for two consecutive quarters, with the revenue surpassing expectations at $928 million. This increase was largely attributed to a rise in non-royalty income, particularly licensing, and an increase in royalty rates. Arm Holdings also reported exceptional Q4 results for fiscal year 2024, with revenues increasing by 47% year-over-year.
Rosenblatt Securities and Bernstein SocGen Group have both provided analysis on Arm Holdings. Rosenblatt maintains a Buy rating on Arm Holdings, highlighting the company's PC and compute capabilities. The firm also adjusted the licensing revenues forecast for upcoming quarters, but the projections for full-year fiscal year 2025 sales and Non-GAAP Earnings Per Share (EPS) remain the same. Bernstein SocGen Group, on the other hand, raised the price target from $72 to $92, while maintaining an underperform rating on the stock.
Arm Holdings' expansion into AI chip design has been met with skepticism, but the company continues to see positive signs in data center and laptop markets. The company anticipates over 20% revenue growth in the upcoming year, aiming to reach $4 billion in revenue. However, Arm's guidance for fiscal year 2025 did not exceed investor expectations. The forecast for Q1 revenue is set at $900 million, with full-year revenue projected at $3.95 billion. These are the recent developments for Arm Holdings.
InvestingPro Insights
As Arm Holdings plc (NASDAQ: ARM) prepares to join the prestigious ranks of the Nasdaq-100 Index®, recent data and analysis from InvestingPro provide an insightful glimpse into the company's financial health and stock performance. Arm Holdings is not only expected to experience net income growth this year, but also has seen a significant number of analysts—seven to be precise—revise their earnings estimates upwards for the upcoming period, signaling confidence in the company's future profitability.
InvestingPro data highlights Arm Holdings' robust market capitalization of $161.87 billion USD, reflecting its substantial presence in the technology sector. The company's Price/Earnings (P/E) ratio stands at a lofty 491.26, with an adjusted P/E ratio for the last twelve months as of Q4 2024 at an even higher 529.62. This suggests that investors are willing to pay a premium for Arm Holdings' shares, possibly due to the company's growth prospects or market position.
The stock's impressive one-week total return of 15.73% further underscores its recent strong performance, which may have been a contributing factor to its inclusion in the Nasdaq-100 Index®. Moreover, Arm Holdings' shares are trading near their 52-week high, at 96.37% of the peak value, indicating that the stock is currently enjoying a period of investor favor.
For those looking to delve deeper into the financial intricacies of Arm Holdings, InvestingPro offers additional insights. With PRONEWS24, readers can access an array of InvestingPro Tips, such as the company's liquidity position, level of debt, and valuation multiples. Currently, there are 19 additional tips listed on InvestingPro that can help investors make more informed decisions about Arm Holdings.
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