I’m thinking of opening a buy position in ARM. With Intel struggling and some manufacturers shifting towards ARM-based devices, it seems like an interesting opportunity. Also, ARM looks to be around 20-30% undervalued, but I wanted to hear from folks with more experience. Any insights?
I love ARM! Got two shares myself!
Oli said:
I love ARM! Got two shares myself!
Two shares of ARM, huh? Going big! 
ARM is way overpriced in my opinion. Their cap-to-income ratio is up around 272, and cap-to-equity is about 36, using 2023 data. These are extremely high. I usually consider something undervalued when cap-to-income is under 10, and cap-to-equity is below 3. Even for tech, those numbers are steep.
@Koa
But do you know what ARM actually does?
@Koa
Same thoughts here… looks overpriced to me, honestly.
One thing Intel has going for it over ARM is the x86 architecture, which most desktop software uses. I read that Microsoft’s ARM-based “Copilot+ PCs” had issues running games and other software because they were designed for x86.
ARM has to improve in emulating x86 without losing performance if they want to make a dent in the desktop market. Not an expert, just something I read in WSJ.
@Nyle
It’s actually not that big of a deal to recompile software for ARM. Most programming languages have compiler settings for it, so it’s doable without much effort. Optimizing is a bit more work, though.
@Sam
But what about older software? Will that run on ARM without updates?
Nyle said:
@Sam
But what about older software? Will that run on ARM without updates?
Good question. No, older software won’t run natively. You’d need emulation, which does come with a performance hit.
That said, with modern CPUs, the emulation performance hit might not be as noticeable as you’d think.
Cy said:
@Nyle
The desktop market is shrinking anyway. The real growth is in servers.
True, but mobile is where ARM shines, especially for power efficiency. ARM’s future could be in ‘edge’ computing and AI.
Cy said:
@Peyton
Mobile is already saturated, though, and ARM basically owns that space. Not much room left to grow.
Maybe, but power efficiency is key in AI datacenters, and ARM’s efficiency makes it appealing there. AI growth could push ARM’s adoption further.
@Nyle
This is changing fast. x86 used to be the main choice, but compilers can support ARM too. Compatibility layers, like Wine, can make ARM run x86 apps (I’m running Diablo 4 on my M3 Mac without emulation). Intel has real competition coming up.
@Nyle
If ARM becomes mainstream, developers will follow the money and adapt their apps for ARM.
Corey said:
@Nyle
If ARM becomes mainstream, developers will follow the money and adapt their apps for ARM.
But what happens to older x86 software?
Corey said:
@Nyle
If ARM becomes mainstream, developers will follow the money and adapt their apps for ARM.
But what happens to older x86 software?
Companies like Microsoft will push users to upgrade. Software licenses don’t guarantee compatibility forever.
@Corey
Yeah, but it’d be annoying if my older games didn’t work. If I lose Commandos 2 on Steam, that’d really suck.
Nyle said:
@Corey
Yeah, but it’d be annoying if my older games didn’t work. If I lose Commandos 2 on Steam, that’d really suck.
I get it. I’ve kept Photoshop on an old Mac because newer iOS versions don’t support it. Sometimes you’ve just got to find a workaround.
@Nyle
This really only matters for end users. In servers, which are mainly Linux-based, moving to ARM is straightforward.
ARM is overpriced. I’d wait a year.