This chip stock is tumbling. Bullish Evercore ISI thinks it will be worth $1 trillion one day

Shares of CPU-maker Arm Holdings are diving Thursday as concerns about its ability to meet surging chip demand overshadowed better-than-expected fiscal fourth quarter revenue and earnings . But Evercore ISI has nothing but confidence in the semiconductor designer and thinks its market value could one day surpass $1 trillion, putting it in league with other megacaps like Nvidia , Apple , Alphabet and Microsoft . "ARM has the similar necessary ingredients to cross that $1T threshold themselves, namely that ARM is a de facto standard for rapidly emerging CPU standard in handsets, AI datacenter, IoT, auto robotics, in rapidly growing markets (agentic AI) that plays to their long suit in CPU technology," analysts Mark Lipacis and Joseph McCormack at Evercore wrote in a Thursday note to investors, referring to central processing units and the Internet of Things. A market capitalization of $1 trillion would make Cambridge, England-based Arm worth nearly five times its current value of some $209 billion, according to FactSet. The Evercore analysts see Arm's real advantage for expanding its market cap in its diverse and well-established network of suppliers and customers. They've gotten the hard part out of the way, which will allow for the easier work of ramping product, they said. …