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The energy sector is undergoing a massive transition. It is switching fuel sources from carbon-based fossil fuels to lower-carbon alternatives. This transition will take decades and trillions of dollars to complete.

This has been a terrible year for Twilio (NYSE: TWLO) investors so far, as shares of the company have fallen 20%. The cloud stock's negative returns are in stark contrast to those of the broader technology sector, which has been heading higher this year following a stellar 2023,

Most investors understand the importance of diversifying their portfolios. However, there's no denying that technology stocks regularly outperform most other industries' stocks. That's why it wouldn't be entirely wrong to take on some additional exposure to these names and to the

The pace at which artificial intelligence (AI) has become the dominant trend in technology has been truly astounding to watch. AI has been part of our everyday lives for years now, underpinning everything from online searches to mapping programs and from smart home devices to pro

Stocks can help you retire rich. Not as in "get rich quick," but steady compounders that slowly and surely make you money for decades. Those companies are challenging to find. To help in your search, know that technology giant Microsoft (NASDAQ: MSFT) is one of them.

Nvidia has hit record highs, and topped $1,000 per share after its fiscal Q1 earnings earlier this week. What's next for the stock as its AI growth story continues to surpass expectations?

The Nasdaq Composite index has climbed about 118% over the last five years despite the COVID-19 pandemic and an economic downturn in 2022. The figure illustrates how lucrative investing in certain companies and holding even amid poor market conditions can be.

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Apple (NASDAQ: AAPL) has a mammoth valuation near $3 trillion. It's one of the most valuable companies in the world, trailing only rival Microsoft in market cap. But many analysts and investors remain optimistic that the business can become even more valuable in the future.

When Google restructured its business as Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) it broke out its Other Bets segment from its core Google operations. While many investors are familiar with some of those other bets like Waymo (autonomous vehicles) and Verily (life sciences), the s

Arm Holdings ( NADSAQ:ARM ) stock is up 52.7% year-to-date. In fact, the stock is up more than 100% since its listing on September 14, 2023, at $51 per share. It’s also the seventh most valuable company in the UK. However, at 130x forward GAAP earnings, I feel that Arm Holdings stock might be priced for perfection. So, while I’d love this British success story to succeed further, I’m neutral on the stock. Arm Holdings Is a Brilliant Business Arm is a great business, and this is reinforced by its extraordinarily strong margins. Arms Holdings’s highest quarterly gross margin in recent years was 96.04%, and it rarely drops below 90%. This reflects the company’s business model, whereby it doesn’t actually produce the chips itself but licenses out its architecture. It’s also a market leader in efficient chip design, and that’s reflected in its growing market share across most core segments. With increasing floorspace designated to artificial intelligence (AI) accelerators, Arm will likely continue to build out its position in the mobile and laptop market. Moreover, Arm’s chip design appears to be a clear winner with data centers, with hyperscaler capex (capital expenditures) representing a major tailwind for the British company. Arm currently plays a major role in mobile and laptop processors, but it also helps design a lot of chips for the data center market. Tech giants including Microsoft ( NASDAQ:MSFT ) and Amazon ( NASDAQ:AMZN ) create chips based on Arm solutions. These big companies develop Arm-based chips tailored to their specific CPU design requirements. Arm Holdings’ AI Chips Arm Holdings is set to develop its own AI chips, with a prototype expected by spring 2025. That’s according to Nikkei, which said the UK-based semiconductor designer was looking to increase its exposure to the booming AI segment. The report suggests that Arm Holdings will create its own AI chip division, which will later be spun off into its own company. The new entity would be owned by SoftBank ( OTCPK:SFTBF ), which holds a 90% stake in Arm. While Arm has decided to produce its own AI chips through contract manufacturing, some suggest that continuing to license its AI chip architecture to other companies would align better with its traditional business model. According to reports, however, initial development costs could reach hundreds of billions of yen, with contributions from SoftBank. Masayoshi Son has set aside JPY 10 trillion to turn SoftBank into an AI powerhouse, with some of that funding likely going towards the initiative. Nikkei stated that Son had visited chip manufacturers in Taiwan and the U.S. to discuss available production capacity. SoftBank plans to build data centers equipped with its chips in the U.S., Asia, Europe, and the Middle East from 2026, alongside wind and solar farms to power them. Sadly for Brits like me, I doubt any of these will be in the UK. So, what does this mean for Arm Holdings? Well, we know so little about it. It’s hard to say. However, if Arm’s funds are used to develop a new AI chip entity that is eventually spun off to be owned by SoftBank, it might not be beneficial for Arm shareholders. Of course, it wouldn’t be as straightforward as that, but it’s possible that shareholders in the UK firm could lose out depending on the way things play out. It could, however, be a win for shareholders depending on several factors. We just don’t know enough yet. ARM Stock Is Priced for Perfection Arm’s valuation is wild. It’s trading at 130x forward GAAP earnings and 72.3x forward non-GAAP earnings. It’s one of the most expensive stocks I’ve come across from a near-term perspective, and it’s very hard to justify such a valuation. Arm Holdings really does appear to be priced for perfection. Any earnings miss or a drop in guidance could result in a serious drop in the share price. Of course, so many of us are bullish on the chip sector, data centers, and AI at the moment — myself included. As such, it seems unlikely that Arm Holdings will drop its guidance. But sentiment can change quickly. Currently, Arm Holdings has a price-to-earnings-to-growth (PEG) ratio of 2.4x (1.0x or lower is generally seen as undervalued). Is Arm Holdings Stock a Buy, According to Analysts? On TipRanks, ARM stock comes in as a Moderate Buy based on 12 Buys, five Holds, and one Sell rating assigned by analysts in the past three months. The average Arm Holdings stock price target is $117.60, implying 2.6% upside potential. The Bottom Line on Arm Holdings Arm Holdings is an excellent business with amazing margins. In fact, I can’t name another stock that comes close to those margins. However, with a forward price-to-earnings ratio of 130x (72.3x non-GAAP), I find it very challenging to get behind the stock. Its reported desire to enter the AI chip segment sounds interesting, but we need more information before we can truly understand what this means for the stock. Disclosure

The tech industry is a dynamic and rapidly evolving sector of the stock market, characterized by innovation and rapid growth. Companies in this sector typically engage in the development, production, and distribution of technology and Internet-related services and products. These

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Amazon AMZN is constantly gaining traction among sports clients on the back of its robust cloud services portfolio.This is evident from the latest five-year agreement between Amazon Web Services (“AWS”) and FWD Group Holdings Limi

Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Ross Stores Inc (Symbol: ROST), where a total volume of 23,171 contracts has been traded thus far today, a contract volume which is representative of approximatel

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For Immediate ReleaseChicago, IL – May 24, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financ

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

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Microsoft (MSFT) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.