Claude Code & the CPU Boom: A Quiet Opportunity

So, the tech world has been having a bit of a wobble lately – what’s being called a “SaaSpocalypse.” It sounds rather dramatic, doesn’t it? Like a biblical plague, but involving subscription software. The truth, as is so often the case, is a little less apocalyptic, but it is a signal. Investors, you see, are starting to get a whiff of something genuinely disruptive, and it’s not another social media platform promising to connect us all in ever more bewildering ways. It’s Artificial Intelligence, specifically a little something called Claude Code from Anthropic.

Now, Anthropic is one of those AI companies that pops up every other Tuesday, all promising to revolutionize everything. But Claude Code, it seems, is different. Semianalysis – a blog followed by people who know an awful lot about semiconductors, which is more than I do, frankly – has declared it a potential inflection point in what they call “Agentic AI.” Apparently, this means AI is moving beyond simply answering questions to actually doing things. They predict it could be responsible for over 20% of all code changes on GitHub by the end of the year. That’s a staggering thought when you consider how much code is already sloshing around in the digital ether. It’s a bit like discovering a new species of digital worker, isn’t it?

The implication, if you follow this sort of thing (and I’m trying to), is that manual coding is, well, fading. They’re calling it “vibecoding,” which sounds suspiciously like something you’d do after a particularly good concert. The idea is you simply tell the AI what you want, and it writes the code. It’s rather like ordering a bespoke suit from a very efficient, very digital tailor. This, in turn, should accelerate the development of these “AI agents” – programs that can operate independently, handling tasks that used to require a human being. Which is either wonderfully efficient or a prelude to the robot uprising. It’s hard to say, really.

Who Stands to Benefit?

Naturally, a great many companies are jostling for position in this brave new world of Agentic AI. But one, rather quietly, looks particularly well-positioned: Arm Holdings (ARM +11.66%). Now, Arm isn’t a name that typically sets the pulse racing. They don’t make flashy graphics cards or self-driving cars. They license instruction sets for CPUs – the brains of pretty much everything digital. But it turns out, in this new AI landscape, the CPU might be having a bit of a moment.

All the attention lately has been on Nvidia and their GPUs, which are indeed vital for training AI. But according to Jason Child, Arm’s CFO (and a man who clearly knows his semiconductors), CPUs will handle the bulk of the actual work in Agentic AI. Apparently, these AI agents need something to orchestrate their activities, and CPUs are rather good at that. It’s a bit like having a conductor for an orchestra of algorithms. So, demand for CPUs could surge, and Arm, being a major player in that space, is already seeing a tailwind. Their data center revenue more than doubled year-over-year, which is, shall we say, encouraging.

Management is now suggesting their data center business could surpass mobile as their largest category in a few years. That’s a significant shift, and a reassuring sign, especially given they recently guided to slower revenue growth in the near term. Sometimes, the most interesting opportunities are found not in the headlines, but in the quieter corners of the market.

Is Arm a Buy?

Arm stock isn’t cheap. It’s trading at a price-to-earnings ratio of around 100, which is… substantial. But the company has levers to pull. Beyond the surge in CPU demand from Agentic AI, they’re also benefiting from increasing royalty rates as more revenue comes from newer products like Armv9 and Compute Subsystems (CSS). It sounds terribly complicated, but the gist is they’re getting more money for each chip sold.

With their data center business doubling and Agentic AI poised to take off, there’s still considerable upside potential for Arm. It’s not a guaranteed winner, of course. Nothing ever is. But it’s a company quietly positioning itself for a potentially transformative shift in the tech landscape. And sometimes, that’s all an investor can ask for.

2026-02-07 05:32

Who Stands to Benefit?

Is Arm a Buy?

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