NVIDIA Insiders Say You Need to Own This AI Stock! Arm Holdings Explained?

**SPEAKER_1** (0:00)
Let's talk about Arm.
We posted that, I know that's been a lot of attention about that. So Arm sat at Stellar a couple of weeks. No, you had the stock call, well, not stock call, you had the options call two weeks ago at EY University, and you talked about that. So, and that option is up 300%. But Breakdown, not just the option, but Arm as far as what is Arm for people that don't even know what it is, why has it been running, and why is it the hot stock of the moment?

**SPEAKER_2** (0:36)
Yeah, so shout out to everybody that's in it. I call it the Army, the Arm Army now.

**Ian** (0:41)
That's fire.

**SPEAKER_2** (0:43)
A lot of people in that. So shout out to everybody, number one, that pulled up to the class and executed on that. Some people did a lot better than I'm doing, which is, I love, because I'm like, all right, they went shorter term. But I speak on it a lot. A lot of times, you'll do research on companies, and then every now and then, you'll get validated with that research. And so, when we had the opportunity to go to Nvidia in April, doing research on the semiconductor space, understanding where ARM is, I remember we were sitting there, and they were asking questions. And one of the things that was prompted was, all right, who makes our memory? Who's doing the motherboard? Here's our GPU. This is what it looks like. Oh, this is ARM. They're the architecture for this. And I was like, oh.
Okay, here comes the validation. And so, I want you to think of it in terms of, Nvidia will take them as a company, right? They design ARM manufacturers. Now, because they manufacture or create architect, I shouldn't say manufacture, TSM does that. Because they architect the design, they're able to do that almost for any company, right? So, when we're talking about the AI revolution, ARM really doesn't have a capex, right? They're actually building architecture for Nvidia. They're building it for Apple. They're building it for Qualcomm. And pretty much, I mean, a lot of the semiconductor space. The part that makes them so attractive is that they charge royalties. And we know royalties like when we listen to music, right? Like, how did you get your royalty check? Meaning, how much did you make over each album sold? So think of it like that. ARM is making royalties over each chip that is sold. So imagine if they're making the architecture for Blackwell, if they're making it for Vera Rubin, if they're gonna make it for Feynman in the future. That's millions of chips. That's number one, they're gonna get money off of creating the architecture. But then number two, they're gonna get royalties on top of each cell.
And so I'm like, wow, this sounds like a company that you should definitely have in the portfolio for a couple of reasons. Now, when they reported they had a blowout quarter, but the royalty rate got a little bit underperformed of what people thought. But that doesn't mean it's not gonna keep continuing to grow. Because again, look at their partners. Think about this.
If we got design, we got architecture, what does that architecture actually do? Well, that actually creates the language for that GPU, right? So the language in the rule book of how that GPU is going to perform, that's Arm's responsibility. So they can build app, they can, Apple can use them for architecture to build their M series ship. Nvidia is gonna use them for their number one GPU. But the best part is that they're also now doing it for the CPU. Why is that important? On Friday, 3 23, right? When we want to talk about a run sometimes. So we invested in that two weeks ago based on that story.
The CPU story is a very interesting one because Arm's architecture is all over AMD and it's inside of the story.
3 23 on Friday, Nvidia says, we're about to change the face of PC. The next era is upon us, right? Microsoft does a simultaneous tweet. Arm does the simultaneous tweet, which means partnership is on the horizon. Last night, if you watched, Jensen said, the next evolution of the PC is here. Who's the architecture? Arm. Who's the main? It's going to be Microsoft. Who's the compute inside? It's Nvidia.
Think about that in terms of AI now, not just being an application, but actually being the hardware that you're now going to buy. It's going to change in the vision of how they're looking at it is, okay, the same way that everybody had a personal computer in the 90s and early 2000s, that was great and you use that for certain functions. Going forward, they're going to look at personal compute as an engine that now powers your household, right? So your agentic AI will be running from a central station that is the TPU.