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ARM vs FORM
Which Stock Would AI Choose? Arm Holdings (ARM) vs. FormFactor (FORM) Stock Comparison
Key Takeaways
- Both ARM and FORM operate in the semiconductor sector, with ARM focusing on IP licensing and FORM on testing equipment, benefiting from AI-driven demand.
- FORM has dramatically outperformed ARM in recent market activity, posting a YTD return of approximately 160% compared to ARM's 90%.
- ARM boasts a much larger market cap of over $220 billion versus FORM's $10-11 billion, reflecting its dominant IP position.
- Recent earnings beats for both: FORM reported Q1 revenue up 32% YoY with EPS surge, while ARM anticipates Q4 growth amid AI tailwinds.
- Valuations are elevated for both, with trailing P/E ratios exceeding 150x, signaling high growth expectations but potential volatility risks.
- AI and high-bandwidth memory (HBM) trends bolster sentiment for both stocks in recent weeks.
Introduction
This stock comparison examines ARM and FORM, two semiconductor players riding the AI and advanced computing wave. Arm Holdings plc licenses processor designs essential for mobile, data centers, and AI chips, while FormFactor, Inc. provides critical testing solutions for wafers and devices. Traders seeking exposure to semiconductor growth, particularly in AI infrastructure, and investors tracking relative performance in this high-momentum sector will find value in analyzing their business models, recent momentum, and market positioning. Both have surged amid broader chip demand, offering insights into sector dynamics and trade-offs between scale and specialized growth.
ARM Overview and Recent Performance
Arm Holdings plc (ARM) is a leading designer and licensor of central processing unit (CPU) intellectual property (IP) and related technologies, powering over 99% of smartphones and expanding into data centers, automotive, and AI applications. The company operates an asset-light model, generating recurring royalties from chip shipments based on its designs.
In recent market activity, ARM stock has shown strong upward momentum, with shares rising about 40% over the past month and delivering a year-to-date (YTD) gain of around 90%, significantly outpacing broader indices. This performance reflects robust demand for its energy-efficient architectures in AI computing, highlighted by partner product launches and anticipation for Q4 fiscal 2026 earnings, where consensus expects revenue growth of 18% year-over-year. Sentiment has been buoyed by AI catalysts, including new CPU developments for inference, though elevated valuations (trailing P/E over 270x) introduce volatility. Trading volume has spiked amid sector rallies, underscoring investor focus on its central role in next-generation chips.
FORM Overview and Recent Performance
FormFactor, Inc. (FORM) designs, manufactures, and sells probe cards, analytical probes, and systems for semiconductor testing, serving DRAM, NAND, and advanced logic markets including high-bandwidth memory (HBM) critical for AI accelerators.
Recent weeks have seen explosive gains for FORM, with the stock up roughly 30% in the past month and a staggering YTD return near 160%, dwarfing market benchmarks. This surge follows Q1 fiscal 2026 results showing record revenue of $226 million (up 32% YoY), driven by 69% growth in DRAM revenues from HBM and non-HBM demand, alongside non-GAAP EPS of $0.56 beating estimates. Operating margins expanded sharply, reflecting operational leverage. Positive guidance for Q2 revenue around $240 million has fueled optimism. Market sentiment centers on its positioning in AI testing needs, though high multiples (trailing P/E over 150x) signal stretched valuations amid sector enthusiasm.
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Head-to-Head Comparison
ARM and FORM share semiconductor exposure but differ markedly in business models: ARM's IP licensing yields high margins and scalability with recurring royalties, contrasting FORM's capital-intensive equipment sales tied to fab cycles. Growth drivers align on AI—ARM via CPU designs for edge-to-cloud, FORM through HBM testing—but FORM shows hotter recent momentum from DRAM surges.
Risk factors include cyclicality for FORM (probe card demand fluctuations) versus ARM's royalty visibility tempered by customer concentration. ARM's $220B+ market cap dwarfs FORM's $11B, offering stability but less upside torque. Both trade at premium P/E ratios (>150x), with sector sentiment elevated by AI yet vulnerable to macroeconomic shifts or supply chain issues. Trade-offs pit ARM's moat against FORM's specialized growth in testing.
Tickeron AI Verdict
Tickeron’s AI currently leans toward FORM based on superior recent trend consistency, explosive relative momentum (160% YTD vs. 90%), and catalysts like HBM-driven earnings beats amid AI testing demand. While ARM offers greater scale and stability, FORM's positioning suggests higher near-term probability of outperformance in the semiconductor rally, though both face valuation risks.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full Disclaimers and Limitations.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ARM is a Hold and FORM is a StrongBuy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ARM’s FA Score shows that 1 FA rating(s) are green whileFORM’s FA Score has 2 green FA rating(s).
- ARM’s FA Score: 1 green, 4 red.
- FORM’s FA Score: 2 green, 3 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ARM’s TA Score shows that 4 TA indicator(s) are bullish while FORM’s TA Score has 6 bullish TA indicator(s).
- ARM’s TA Score: 4 bullish, 4 bearish.
- FORM’s TA Score: 6 bullish, 3 bearish.
Price Growth
ARM (@Semiconductors) experienced а +11.05% price change this week, while FORM (@Electronic Production Equipment) price change was +19.29% for the same time period.
The average weekly price growth across all stocks in the @Semiconductors industry was +4.34%. For the same industry, the average monthly price growth was +5.81%, and the average quarterly price growth was +92.59%.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was +17.31%. For the same industry, the average monthly price growth was +9.95%, and the average quarterly price growth was +135.39%.
Reported Earning Dates
ARM is expected to report earnings on Jul 29, 2026.
FORM is expected to report earnings on Aug 05, 2026.
Industries' Descriptions
@Semiconductors (+4.34% weekly)The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
@Electronic Production Equipment (+17.31% weekly)The electronic production equipment industry makes equipment used to produce semiconductors. Such equipment includes wafer fabrication, plasma etching and photo-resist processing equipment. The industry also makes chemical vapor deposition processing systems and photomasks, which are high-purity quartz plates that contain patterns to define integrated circuits layouts. Applied Materials, Inc., Lam Research Corporation, and KLA-Tencor Corporation are examples of electronic production equipment manufacturing companies.
| ARM | FORM | ARM / FORM | |
| Capitalization | 407B | 10.9B | 3,734% |
| EBITDA | 1.16B | 128M | 904% |
| Gain YTD | 248.376 | 149.570 | 166% |
| P/E Ratio | 448.01 | 160.01 | 280% |
| Revenue | 4.92B | 840M | 586% |
| Total Cash | 3.6B | 303M | 1,188% |
| Total Debt | 457M | 31.9M | 1,433% |
FORM | ||
|---|---|---|
OUTLOOK RATING 1..100 | 74 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 79 Overvalued | |
PROFIT vs RISK RATING 1..100 | 15 | |
SMR RATING 1..100 | 82 | |
PRICE GROWTH RATING 1..100 | 35 | |
P/E GROWTH RATING 1..100 | 5 | |
SEASONALITY SCORE 1..100 | 14 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
| ARM | FORM | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 77% | N/A |
| Stochastic ODDS (%) | 2 days ago 90% | 2 days ago 82% |
| Momentum ODDS (%) | 2 days ago 87% | 2 days ago 75% |
| MACD ODDS (%) | 2 days ago 68% | 2 days ago 77% |
| TrendWeek ODDS (%) | 2 days ago 88% | 2 days ago 79% |
| TrendMonth ODDS (%) | 2 days ago 89% | 2 days ago 81% |
| Advances ODDS (%) | 2 days ago 87% | 2 days ago 77% |
| Declines ODDS (%) | 4 days ago 78% | 4 days ago 68% |
| BollingerBands ODDS (%) | 2 days ago 73% | 2 days ago 90% |
| Aroon ODDS (%) | 2 days ago 90% | 2 days ago 80% |
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