British mobile chip architects ARM’s stock is probably one of the best investment opportunities at the moment. That’s the conclusion one can draw after Morgan Stanley raised its rating on ARM Holdings from Equal Weight to Overweight.
“The risks on earnings remain clearly on the upside,” analyst Francois Meunier explained. ARM’s got a two-year headstart on Intel in the mobile market. These were the reasons behind Morgan Stanley’s promotion of the stock to “Best Idea.” The tipping point? The iPad, of course, but also Windows 8 on ARM.
And for the time being, ARM’s success is not hugely dependent on the upcoming Windows 8 platform, so even if something goes wrong with Windows 8 on ARM, the chip designer still has plenty of space for growth.
Morgan Stanley also asserts that despite Intel’s efforts, the company won’t be able to catch up with ARM in the coming two years. Intel on its part is looking for partners to bring its Atom chips to mobile devices and so far Motorola, Lenovo and Orange have announced devices with its silicon.