ARM Holdings (ARM) was added to the Nasdaq 100 (^NDX) on Monday after its share price rose about 140% since its listing in September. ARM Holdings CEO Rene Haas appears on Market Domination Overtime to discuss the milestone and the outlook for the UK semiconductor company.
Haas said AI “is really going to transform people's lives in terms of productivity. Whether it's 100% automating call centers, or whether it's shortening cancer drug research from 10 years to five or even three years in medical and bio research. All of that can be done with AI. And every device we use, data centers, cars, PCs, smartphones, all of these things will need to run AI. There's no disputing that.”
He noted that 70% of the world's devices use Arm chips, giving the company a leg up in the overall AI race. He added that AI is growing rapidly, saying, “With all due respect, I think analysts didn't fully appreciate or realize the pace at which things are moving.” He believes the technology will be a boost for both smartphones and Arm, saying, “Most of these devices are already Arm-based, and the software runs on Arm, so it's only natural that we'd be at the center of it.”
For more expert insights and the latest market trends, click here to watch this entire episode of Market Domination Overtime.
This post was written by Melanie Leal
Video Transcript
Arm's holdings were added to the Nasdaq 100 index today, with the British semiconductor company also being included in several other Nasdaq indexes.
Arm's stock price has risen almost 100% since its initial public offering in September, up 40%. Mr. Haas, CEO of Arm Holdings, joins us now. Renee, it's great to have you. And let's start with that news. Renee, I'm curious what you, I mean, what you think about that.
What does it mean to include arm like this?
Renee, you know, do you think this will be kind of a milestone for the company?
What are you telling your team?
Well, thanks for accepting me.
That is certainly a milestone.
That's something we're proud of.
Well, the NASDAQ 100.
It's elite company.
So it's a very, very exciting day to have Arm included in this and the employees and the company are excited. You're excited to have this day as well, but I'm curious because there's been a lot of talk about retail investors lately, Lenny, right?
The meme stock market is showing signs of recovery again.
I think Tesla is also part of this phenomenon because of its retail stock, for example, the participation of retail shareholders in the recent vote.
So what do you think about the group of people who are interested in owning shares in Arm Holdings?
To be honest, I don't think about it much.
Well, my focus is on strategies to grow the company.
Well, one of the things I love most about my job is talking about technology for 2026, 2027, 2028.
Well, thinking about the question that you just asked, I understand the question, but it's really not where I put much emphasis.
Well, Lenny, let's talk about an area that you seem to be watching, which is the megatrend of AI, and Lenny, we've spent a lot of time talking about that, of course, on this show.
Investors are very excited. And I would argue, Renee, you and I would argue, certainly, well, in fact, the last time we spoke, Renee, you basically said that you can't run AI without AC PU. Renee, can you explain that?
What do you think about Arm's opportunities here?
When we talk about this megatrend of AI, how big is the opportunity?
How do you quantify that, Renee?
Well, I was alive in the .com era, and actually, to me, .com started in the late '90s with the creation of the browser and the internet.
To me, this is really significant because what AI is enabling is going to really transform people's lives in terms of productivity — in call centers, healthcare could be 100% automated, in bio research, it could shorten the time it takes to develop a cancer drug from 10 years to 5 or even 3 years.
All of this will be made possible by AI, and we will need AI running in our data centers, our cars, our PCs, our smartphones, and every device we use. There's no debate about that.
And with 70% of the world's devices currently using ARM, there is already a need to use AI on ARM-based platforms.
It makes sense for us to be involved in that.
So that's why we spend a lot of time on this.
But I don't think it's an exaggeration.
I think it will be a pivotal moment in history when we look back on it in terms of what it is capable of and what it will achieve.
Well, Renee, the relationship between AI and ARM is very interesting. When the IP O was announced last September, there was a lot of talk about AI, but we were talking to a lot of people who said that AI is not yet an ARM story, it's still in its infancy.
And it seems like you've been gaining momentum in that area a little bit.
So can you tell our listeners and viewers now where Arm is in that cycle?
Yes, thank you for your question.
With all due respect, I think the analysts probably didn't fully appreciate or realize the pace at which things were moving.
Well, people used to think that AI meant running massive language models in data centers.
But nine months later, AI PCs have arrived, and Chet Chet G BT 40 on your phone performs voice recognition, running in conjunction with the cloud and local devices.
There's an AI tool called Gemini that runs on your phone.
Nobody was talking about these things a year ago, and in fairness, it's not because analysts didn't understand them.
It's just that this is just happening at this pace.
And by definition, because of all the investment that's being made in terms of training, all of that training needs to be reflected in the application.
And most of those applications will be on handheld devices.
Or consumer devices.
So I think even the analysts didn't quite grasp how fast things were moving.
One of the things we like to talk about is that software is evolving much faster than hardware.
I think that's the key lesson we learned, and probably the analysts learned too.
Lenny, let's also talk about smartphones.
I want to hear your thoughts, because we had an analyst on the show, Renee, who said that she thinks AI is going to be a real boost to the smartphone market, at least in the premium segment. And what does that mean or what do you think it will be?
As we all know, these smartphones evolve every year, adding new technologies that put a lot of strain on the system in terms of battery performance and heat.
Now, if you need to run AI applications on top of all the applications you were running before, that becomes a complex design problem.
This is also something arm is very good at.
Most of these devices are already ARM-based and the software runs on ARM, so it's only natural that we'd be at the heart of it.
So we're very excited to see the tailwinds not just in phones, but also in IP CS, automotive and consumer devices.
I think all of this will be in the cards for the next few years.
Renee, when you talk about the speed at which things are moving, it seems like things are moving a little faster on the enterprise side, but on the consumer side, demand is really high. Maybe not as much.
You're very involved in this so I wanted to hear your take on this: What do you think would be the killer app or the killer use case for AI on the consumer side?
Well, to be honest, I don't think we know yet.
If you think about the transition from 3G to 4G, a few years ago no one could have predicted that the killer app would be the ability to order a car on demand.
This way you will know where you stand, you can get rental properties at very low discount prices and you will be able to find them quickly.
But, as we all know, apps like Airbnb and Uber came with 4G. When we think about consumer AI, the hardware has to be enabled first, which is already happening, and then the apps will follow.
But history shows that the model tends to work that way.
So, I don't know if the killer app has arrived yet, but I'm sure it will arrive soon.
Renee, thank you so much for joining us on Yahoo Finance.
We are very grateful for your participation.
thank you.
