Right then. Artificial intelligence. Everyone’s chasing it like a particularly shiny goblin after a dropped copper. It’s fueled a good deal of speculation, naturally, and a corresponding amount of shifting about amongst companies trying to look like they’ve always been at the forefront of sentient toasters. Two such companies, Navitas Semiconductor and Arm Holdings, have been making noises. Let’s see if those noises amount to anything resembling a coherent strategy, or just the sound of money being shuffled around a very large table.
Navitas, a maker of… well, tiny, intricate things that make other things go, has seen its stock price do a rather enthusiastic jig lately – up 188% in the last twelve months. A performance that suggests either genuine innovation, or a very successful campaign of convincing people that it is genuinely innovative.1 Arm, on the other hand, is up a more modest 13% year to date, but down 21% over the last year. But, and this is important, Arm seems the more sensible wager. Let’s delve into the why, shall we?
The Navitas 2.0 Pivot – Or, The Alchemist’s Attempt to Turn Lead into Gold
Navitas currently crafts gallium nitride chips. These, for the uninitiated, are more efficient than the old silicon variety, particularly in things like smartphones and other consumer trinkets. They’re a bit like replacing a drafty cottage with a properly insulated manor house – less energy wasted, more comfortable living. But Navitas has decided it wants to build castles, not cottages. They’re pivoting – a word that sounds far grander than it usually is – towards larger power markets like AI data centers, electric vehicles, and industrial contraptions. They’re calling it Navitas 2.0. A rather optimistic name, given the inherent difficulty of re-inventing oneself.
Their CEO, Chris Allexandre, explained it last November, with the sort of confident pronouncements that often precede a slightly bumpy landing. He spoke of capitalizing on “global megatrends.” A phrase that, in the financial world, usually translates to “hoping everyone else believes the same thing we do.” The strategy involves a temporary revenue hit, of course. They’re anticipating a mere $7 million in revenue for Q4 2025, down from $10 million recently and a positively extravagant $22 million a year prior. A temporary sacrifice, they claim, for long-term glory.2 Analysts predict a paltry $36 million for the year, down from $45 million last fiscal year.
They’re banking on partnerships with the likes of Nvidia – a company that seems to have a chip in everything these days – and their brand recognition. A reasonable enough strategy, if you ignore the fact that they’re entering a market dominated by giants. It’s a gamble, certainly, and one that won’t pay off, if the projections are correct, until 2027 or 2028. A long time to wait for a return on investment, even for a patient investor.
The Case for Arm – A Solid Foundation, Not a House of Cards
Arm, on the other hand, is already in a rather advantageous position. They design CPU chips and license the technology to other companies. Think of them as the architects of the digital world, providing the blueprints for everything from smartphones to supercomputers. It’s a dominant player in the mobile phone CPU market – roughly 99% of smartphones use their technology – and they’re expanding into AI workloads with a strategy they call “AI Everywhere.” A bit on the nose, perhaps, but effective.
By the end of 2025, over half of Arm’s revenue was coming from non-mobile licenses, driven by – you guessed it – AI data centers. Their CEO, Rene Anthony Andrada Haas, announced that data center royalties grew a rather impressive 100% year over year. And their market share among hyperscalers for AI data center CPUs is around 50%, up from a mere 18% in 2024. A significant leap, and one that suggests they’re doing something right.3
Haas confidently predicts that their data center business will become their largest, surpassing even mobile. A bold claim, but one backed up by the numbers. Analysts project 50% compound annual growth for this segment through 2030. A truly impressive figure.
Navitas may get there eventually, but Arm is already there. It remains the dominant force in smartphone and consumer electronics CPU designs and is seeing incredible growth in data centers. It’s a solid foundation, not a house of cards.
Wall Street analysts rate Arm as a consensus buy with a median price target of $147.50, representing 17% growth. However, the valuation is currently rather high, and the stock price has dipped 21% recently. A potential buying opportunity, perhaps, for those with the patience to wait for a more favorable price.
In conclusion, while both companies are vying for a piece of the AI pie, Arm appears to be the more sensible wager. It’s a solid company with a proven track record and a clear path to growth. Navitas, on the other hand, is a bit of a gamble. A potentially rewarding gamble, perhaps, but a gamble nonetheless.
1
It’s a bit like claiming you invented sliced bread. Everyone
thinks
they had a hand in it, but the truth is usually far more complicated.
2
Temporary sacrifices are often permanent. A lesson learned by many an ambitious alchemist.
3
Market share is a fickle beast. It can be won and lost with a single clever marketing campaign, or a particularly unfortunate product recall.
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2026-02-24 08:02