--- type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/41299439.md" description: "I. What exactly does ARM do?Many people think ARM is a chip company, but that's not entirely correct. It doesn't manufacture chips itself; it only sells blueprints and technology licenses, somewhat like a real estate developer selling blueprints instead of building the houses.ARM mainly sells:1. CPU Architecture LicensesFor example:Apple A-series chipsApple M-series chipsQualcomm SnapdragonMediaTek DimensitySome of NVIDIA's AI chipsAmazon GravitonMany of these chips are developed based on the ARM architecture (ARM sets the rules, and chip companies design their own CPUs according to those rules).2. License Fees + RoyaltiesARM's revenue model is very simple:Step 1:Sell design licenses.Step 2:Continue to take a cut after the client's chips are sold (a core and highly profitable revenue stream, taking a 1-2% commission per chip).Therefore, ARM has an excellent business model: the more chips sold globally, the more money ARM makes.ARM's strongest market is mobile.Currently, globally:SmartphonesTabletsSmartwatchesOver 90% of processors are based on the ARM architecture.It can be said:The phone in your hand is very likely making money for ARM.In recent years, ARM has also begun entering:AI serversData centersAutomotive chipsRoboticsEdge computingII. What is ARM's moat?First layer: EcosystemMillions of developers worldwide are developing software within the ARM ecosystem.Second layer: Customer lock-inARM's customers are almost all tech giants (Apple, Qualcomm, and the latest, NVIDIA).These companies have invested heavily in developing ARM-based products and are unlikely to switch easily.Third layer: Low-power advantageARM's biggest technical advantage is:An excellent balance between performance and power consumption.Phones chose ARM in the past because it saved power.Now AI servers choose ARM also to save on electricity costs.As global data center power costs rise, this advantage becomes increasingly significant.Especially in the last two years:AI server demand has grown rapidly.Revenue growth related to data centers is significantly higher than traditional mobile business.This is also the part the capital market is most focused on.III. Why is the market so enamored with ARM?Because the market has realized ARM's story is no longer just about mobile phone companies.ARM's old logic was:The more phones sold, the more money ARM makes.Now it's become:The more AI servers, the more money ARM makes.And the future AI data center market could be larger than the mobile phone market.So the market has started revaluing ARM.Many institutions believe:ARM has the potential to become one of the most important infrastructure companies in the AI era.What institutions value most isn't its current revenue, but its future position.ARM is somewhat like a "toll highway" in the chip industry.It might not be the most profitable chip company, but it's likely one of the most stable revenue collectors.III. Summary and ViewpointIt can be said that subsequent self-developed AI chips, both domestic and international, will basically use ARM architecture design, such as previous ones from Xiaomi, Alibaba, and recent ones from ByteDance, etc. This news will further boost its stock price and institutional outlook for its future.I think it will definitely rise significantly later, possibly even breaking 500, because NVIDIA's June chips are a collaboration with it.The above is just a personal opinion and does not constitute investment advice.$Micron Tech(MU.US)$Intel(INTC.US)$Arm(ARM.US)$Dell Tech(DELL.US)" datetime: "2026-05-31T02:36:00.000Z" locales: - [en](https://longbridge.com/en/topics/41299439.md) - [zh-CN](https://longbridge.com/zh-CN/topics/41299439.md) - [zh-HK](https://longbridge.com/zh-HK/topics/41299439.md) author: "[万山红](https://longbridge.com/en/profiles/15423153.md)" --- # I. What exactly does ARM do?Many people think ARM … ### Related Stocks - [ARM.US](https://longbridge.com/en/quote/ARM.US.md) - [MTK.NA](https://longbridge.com/en/quote/MTK.NA.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [INTC.US](https://longbridge.com/en/quote/INTC.US.md) - [04335.HK](https://longbridge.com/en/quote/04335.HK.md) - [DELL.US](https://longbridge.com/en/quote/DELL.US.md) ## Comments (27) - **知轨道 · 2026-06-08T13:44:03.000Z**: Feeling a bit weak, boss, can you give some pointers? Even a little encouragement would be fine. - **Lucky2026 · 2026-06-01T02:36:45.000Z**: It's already very high. - **万山红** (2026-06-01T09:20:16.000Z): You'll find it even higher then - **Lucky2026** (2026-06-01T09:22:30.000Z): Want to get involved - **Lucky2026** (2026-06-01T09:24:22.000Z): Dizzy, it's rising so sharply, waiting for a pullback, sigh 😮‍💨 - **知轨道 · 2026-05-31T15:08:24.000Z**: Choose one between Dell and ARM - **万山红** (2026-06-01T00:09:38.000Z): It's fine in the short term, just hold off on ARM a bit longer. - **得鹿为鱼 · 2026-05-31T05:32:24.000Z**: Open a watchlist position and see - **万山红** (2026-05-31T05:56:20.000Z): It would be great if there was a chance for a drop - **得鹿为鱼** (2026-05-31T07:22:53.000Z): Haha, open a mini position first. It's best if it goes up; if it falls, average down in batches. - **双双2026 · 2026-05-31T02:47:26.000Z**: arm, keep soaring for me - **万山红** (2026-05-31T02:52:19.000Z): Absolutely necessary, we've collaborated with NVIDIA again and again🤣 Intel might be due for a pullback. - **双双2026** (2026-05-31T03:09:14.000Z): I have Intel and also ARM.... ARM keeps rising every day, so my ARM's market cap has surpassed Intel's.... - **万山红** (2026-05-31T05:56:03.000Z): Because they are developing PC chips, the news is negative for Intel and AMD, but whether it succeeds depends on software adaptation. - **Mr.Yuan · 2026-05-31T02:41:09.000Z**: I only knew that ARM was about licensing and collecting royalties, a steady stream of income. You really have a more detailed understanding. I'll buy it as soon as the market opens next week. I bought Dell and ASTS during Friday's session 😄 - **万山红** (2026-05-31T02:51:44.000Z): Yes, the reason everyone is optimistic about it now is because the chips for AI servers basically also use its architecture, because the US is short on power, and its architecture is power-efficient,