>Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March
>i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality.
Just for comparison, AMD, which is still quite small, gets about $2b - $4b annual net profit. Intel, before their recent disaster quarters, had as much as $24b in annual net profit.
$524m in net income is peanuts compared to the big boys. This is what I was saying in my original post. ARM is a more valuable company if they were acquired by Nvidia. As a standalone company, it's not that great. Again, a weird quirk of ARM is that their biggest customers are also their biggest competitors. This puts a cap on how much profit they can make. If ARM decides to raise licensing fees exponentially, which is likely not simple due to long-term contracts, then companies will seriously look to RISC-V.
Because ARM is the smallest fish in the pond, it can't pay for the best engineers. The best chip engineers will go to AMD, Intel, Nvidia, Apple, Qualcomm, and startups. ARM is where these companies go to poach.
If it was too successful on its own it wouldn't be in all those devices. Whether or not it has the best chip designers its ARM that has changed the world.
It seems a bit like Linux to me - you could say Linus Torvalds is disappointing because he's not as rich as Elon Musk and yet one might argue both that he has done more and that if he had tried to get super rich out of it he would not have achieved so much because every effort to extract significant money would have lessened the breadth of his impact. People wouldn't have co-operated.
>i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality.
Just for comparison, AMD, which is still quite small, gets about $2b - $4b annual net profit. Intel, before their recent disaster quarters, had as much as $24b in annual net profit.
$524m in net income is peanuts compared to the big boys. This is what I was saying in my original post. ARM is a more valuable company if they were acquired by Nvidia. As a standalone company, it's not that great. Again, a weird quirk of ARM is that their biggest customers are also their biggest competitors. This puts a cap on how much profit they can make. If ARM decides to raise licensing fees exponentially, which is likely not simple due to long-term contracts, then companies will seriously look to RISC-V.
Because ARM is the smallest fish in the pond, it can't pay for the best engineers. The best chip engineers will go to AMD, Intel, Nvidia, Apple, Qualcomm, and startups. ARM is where these companies go to poach.