Conviction / Shovels
ARM
Arm Holdings
conviction
Arm designs the processor blueprints used in most of the host chips that sit alongside AI accelerators, and it posted record quarterly revenue with royalties up 22%. The shares are down roughly 40% from their high, but growth in the low twenties is still slower than what the remaining valuation implies.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $280.20 |
| 30-day move | -6.7% |
| Position in 52-week range | 51 |
| From the 52-week high | -38.1% |
| Average daily volume | $1.8B |
Why it is in the fund
Thesis
Arm architecture dominates edge and mobile AI inference, enabling agentic AI to run on billions of devices beyond the data center.
Standing judgment
The CPU instruction set underneath most host processors including Nvidia's Grace and Vera, which puts it adjacent to the bottleneck rather than on it, since the accelerator does the work and the economics are royalties measured in cents per socket. Down 39.6% from the high, the deepest drawdown in the bucket, after losing 34% in July alone. Even at that price it carries the highest multiple here against the slowest growth, so the discount corrects an excess rather than creating a bargain.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 61 | flat | first v3 judgment (v2 score was uninformative, see L-001): A genuine data-center CPU inflection is underway, but 22% royalty growth cannot support a valuation set for a company growing like its accelerator peers. | Q1 FYE27 total revenue $1.29B, up 22% year over year, a company record; royalty revenue $715M, up 22%, a first-quarter record; licensing and other revenue $574M, up 23%; non-GAAP EPS $0.45, up 29%, above the high end of guidance; AGI CPU customer demand now exceeds $2B across FY27 and FY28, double t |
| 2026-08-05 | 61 | +51 | first v3 judgment (v2 score was uninformative, see L-001): A genuine data-center CPU inflection is underway, but 22% royalty growth cannot support a valuation set for a company growing like its accelerator peers. | Q1 FYE27 total revenue $1.29B, up 22% year over year, a company record; royalty revenue $715M, up 22%, a first-quarter record; licensing and other revenue $574M, up 23%; non-GAAP EPS $0.45, up 29%, above the high end of guidance; AGI CPU customer demand now exceeds $2B across FY27 and FY28, double t |
| 2026-07-31 | 10 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 10 | -18 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 28 | +18 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 10 | -9 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 19 | +4 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 15 | -11 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 26 | -24 | ⚠️ v2 rank-normalization artifact, unexplained move | v2 `scores` row |
| 2026-07-24 | 50 | +18 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 32 | -11 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 43 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 46 | +17 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 29 | -9 | migrated from v2 (cause not recorded) | v2 `scores` row |