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Arm Holdings (ARM) expects its market share of data center CPUs to surge in 2025, according to a report from Reuters. Yahoo Finance host Madison Mills and Bullseye American Ingenuity Fund portfolio manager Adam Johnson discuss the report and the chip space more broadly on Catalysts.
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ARM Holdings reportedly projecting its share of the global data center CPU market will surge this year thanks to a boom in AI demand. Reuters reporting that the chip design company expecting its market share will reach 50%, up from 15% in 2024. I'm fascinated that we're seeing so much selling on this name off of a report like that, obviously, it's due to the broader market sell off and not anything specific to them, but you would think that given that that market share growth is so significant from 15 to 50% you'd see a little bit more buying.
Well, I wish that NVIDIA had been allowed to buy them and this is why NVIDIA wanted to buy them. They're a wonderful company. They're a competitor to NVIDIA. I own NVIDIA. Uh I cannot and will not buy arm because as someone who runs the American Ingenuity fund I don't buy stocks outside the US. Uh even stocks that are listed in the US but if they're um domiciled elsewhere then no I can't buy it. Uh it's a wonderful company and it just it just speaks to the need for greater compute. Uh the ability um to compute, um to run all the data that we keep talking about day in day out. Yeah, it's it's a wonderful company.
Do you feel jealous of the China tech names at this moment? Like a little bit in the quiet in the quiet moments of your heart?
No. No, let me let me just speak to that. No. And and I don't mean to sound like a pollyanna, but I tell you what you know, we talk about Deep Seek and people say, "Oh my gosh, this is going to challenge the whole AI ecosystem here in the US." Well, actually look at how they created Deep Seek. They did it with 2000 NVIDIA processors, NVIDIA, American company. Um they also did it with code that was lifted from Chat GPT. Some 40% of the code by a number of estimates, some 40% of the Deep Seek code was effectively lifted out of Chat GPT. Again, Chat GPT owned by Open AI, which is 50% owned by Microsoft. Imagine that, another American company. So the Chinese are just doing what they always do which is rip off American technology, whether it's chips, hardware, or um with code software. And so you say, yeah, but they're going to put all this stuff out for free. It's been ripped off, it's been taken. Okay, fair point, but remember it's the use cases, it's how you apply that technology, that's where the money is ultimately made. And that's why all these companies are taking AI platforms and then developing the use for them internally. That's proprietary and that's where the value is because it increases individual companies' productivity.
Right. The increase of productivity and also potentially a step further if you can monetize some of that AI as well.
That's right. And if you can wrap your heads around increased productivity, um and therefore earnings growth, you're able to look past all the tariff noise and you're able to say, you know what? We should be buying um a NASDAQ that's down 15% from the high.
