Bill Baruch discusses buying ARM Holdings after its 60% weekly increase, highlighting the stock’s potential for significant growth due to its strong earnings report, increased guidance, and its dominant position in the smartphone CPU market.
[transcript]
I mentioned Bill Baruch buying a stock that’s up 60% this week alone. It is ARM Holdings. And he joins us now to explain why the 60% up, you buy it now? Yeah. Yeah, it’s about 10% off the high. So I’ll take that part of it. But before we dive in by again, here’s the things I’m looking at at arm, and it’s all that portfolio positioning.
Amazon’s are number one holding. I talked about Tesla yesterday if you couple aam and Tesla together they’re about a third of our portfolio a third of the size of Amazon. But I want to own these names because I think that they they get four or five X from here over the next three years. Look at the eps that just came out here.
They raised guidance on this report and the lower end of full year guidance for EPS by 20%. Not only that, we’re going to start to see better royalties as as their as their clients switch off the V-8 architecture and move into the nine architecture with better computing. They cover 99% of the smartphone CPU computing market right here. And I just see this this foothold getting bigger and bigger.
I want to have a piece in this game right now, and I see myself adding if it does go lower. So a couple of things. So you’re you’re telling me that none of that what you just said is already in the stock? Number one. Number two, if the market is ripe for some kind of consolidation, wouldn’t this be at the top of the list or certainly near it for stocks that can have a larger draw down than others because of the unbelievably rapid rise?
Well, number one, I mean, here here’s the thing is, is overall this positioning in this in this market not being priced in right now, because I think that this name is now on the list of other managers, other funds that are looking to gain this exposure. Remember, they went public when September, October of last year. From there, you know, these names are not getting bought right away.
The lockup period for those who own it are is extensive. But these names are not getting bought right away. We got through one quarter of earnings reports and then we’re getting this is the main quarter right here. This is what puts it on fund’s radars. This is what puts it on managers radars. So I think now they’re waking up to it.
The big banks that are managing large amounts of money, they’re waking up to their name now. That’s why I want a piece in to it. But when you talk about the broader market in the move that we’ve had and the above 5000 here, new highs typically lead to newer highs. And that’s why here are if we do get a pullback, I think what they’ve done, what they’ve accomplished and announced within this earnings report is going to keep this market out above, you know, the 70 and $80 mark.
I would love to buy it again and add to this position if for some reason it did go to 80 and $90, I think we’ll see it build a nice base out. But the thing is, it may not go down there and the way I look at this, extrapolating in years to come, we’re in the early innings of a i, I at some points have thought that we were maybe in the middle innings.
No, I really think we are in the closer the early first half of I in monetizing it. What we’re seeing here from the hyperscalers from Apple now what we’re seeing for matter of course, Alphabet and Microsoft, they’re going to be putting more money in to this and pumping into it. I got you. I mean, one of the obvious concerns is that some of these stocks have gotten nine innings worth of gains in the first inning.
So it’s something to keep an eye on. I appreciate you joining us, Bill. Brooke, thank you. Up next, Mike Santoli is here with his midday word.