Semiconductor company Arm Holdings PLC (ARM) plans to integrate Nvidia’s (NVDA) NVLink technology into AI data center chips, strengthening the partnership between the two semiconductor giants. The collaboration with one of the world’s leading GPU makers could give Arm a competitive edge in AI workloads. Investors and tech analysts alike are watching closely as the partnership positions Arm to capitalize on the booming AI sector.
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For context, Nvidia’s NVLink is a technology that connects multiple computer chips so they can share data quickly.
What This Means for Arm and Nvidia
Arm announced that it will add Nvidia’s NVLink interface to its Neoverse platform. Arm’s Neoverse is a family of high-performance processors designed for data centers, cloud computing, and AI applications.
Notably, Nvidia uses NVLink to connect multiple chips, enabling them to share data and handle large computing tasks more efficiently through high-speed links. This integration strengthens the ability of Arm’s chips to work seamlessly in AI data centers. Meanwhile, Arm is aiming to expand its Neoverse technology to more hyperscalers, and says its platform is on track to capture 50% of the market.
For Nvidia, which already incorporates Arm technology in its processors alongside its accelerators, a closer collaboration between the two companies could help make NVLink an industry standard.
What Lies Ahead for ARM Stock
Under CEO Rene Haas, Arm has begun offering more comprehensive chip designs to customers, aiming to boost revenue and expand into markets beyond its traditional smartphone business.
Integrating Nvidia’s NVLink could give Arm a competitive edge in the fast-growing AI and data center market, making its chips more attractive to hyperscalers like Amazon’s (AMZN) AWS and Microsoft (MSFT). This strategic move may boost revenue potential and strengthen market share, which could be positive for ARM stock.
Earlier this month, Arm reported 34% year-over-year revenue growth, reaching $1.14 billion for Q2 FY26. The company also forecasts that its market share among top hyperscalers will approach 50% in 2025, signaling strong momentum in the data center and AI chip markets.
Is ARM Stock a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ARM stock based on 13 Buys and three Holds assigned in the past three months. The average Arm Holdings stock price target of $186.54 per share implies an upside of 33% from current levels.
Year-to-date, ARM stock has gained almost 14%.
