ARM HoldingsMEX:ARMN -1.19%61 Gross Margin % is 97.85% as of Mar. 2026, which is 2% above its 10-year median of 95.64. GuruFocus rates MEX:ARMN with a GF Score™ of 61/100 and a GF Value™ of MXN3,132.07 (Significantly Overvalued). The stock has 1 warning sign investors should review. Among 1,011 Semiconductors companies, ARM Holdings ranks better than 99.01% on this metric.
The historical rank and industry rank for ARM Holdings's Gross Margin % or its related term are showing as below:
MEX:ARMN'
s Gross Margin % Range Over the Past 10 Years
Min: 92.85 Med: 95.64 Max: 97.54
Current: 97.54
During the past 6 years, the highestGross Margin % of ARM Holdings was 97.54%. The lowest was 92.85%. And the median was 95.64%.
MEX:ARMN's Gross Margin % is ranked better than 99.01% of 1011
companies
in the Semiconductors industry
Industry Median: 29.61
vs MEX:ARMN: 97.54
ARM Holdings had a gross margin of 97.85% for the quarter that ended in Mar. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for ARM Holdings was 0.90% per year.
ARM Holdings (MEX:ARMN) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
ARM Holdings had a gross margin of 97.85% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
ARM Holdings Gross Margin % Related Terms
ARM Holdings Gross Margin % Historical Data
* Premium members only.
The historical data trend for ARM Holdings's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:ARMN vs TXN, QCOM, ADI: Gross Margin % Comparison
For the Semiconductors subindustry, ARM Holdings's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ARM Holdings Gross Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, ARM Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where ARM Holdings's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
ARM Holdings (MEX:ARMN) has a Gross Margin % of 97.85% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on ARM Holdings and its competitors. This is near median its historical median of 95.64. Over the past decade, ARM Holdings' Gross Margin % has ranged from 92.85 to 97.54. According to the industry distribution chart, ARM Holdings ranks #10 out of 1011 companies in the Semiconductors industry, placing it in the top 1%.
Is ARM Holdings' Gross Margin % too high?
ARM Holdings' current Gross Margin % of 97.85% is near median its 10-year median of 95.64. Over the past 10 years, this metric has ranged from a low of 92.85 to a high of 97.54. The Semiconductors industry median Gross Margin % is 29.61. ARM Holdings' value of 97.85% is 230.5% above this industry median. Based on the distribution chart, ARM Holdings ranks #10 out of 1011 companies in the Semiconductors industry, which is in the top quartile — a strong position relative to peers. Overall, ARM Holdings has a GF Score™ of 61/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does ARM Holdings' Gross Margin % compare to TXN and QCOM?
According to the Semiconductors industry distribution chart, ARM Holdings ranks #10 out of 1011 companies for Gross Margin %. This places ARM Holdings in the top 1% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 29.61. ARM Holdings' value of 97.85% is 230.5% above this benchmark. Historically, ARM Holdings' own Gross Margin % has ranged from 92.85 to 97.54 over the past decade. While the company's 10-year median is 95.64 vs. the industry median of 29.61, ARM Holdings has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,011 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. ARM Holdings's current Gross Margin % of 97.85% is 230.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on ARM Holdings and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ARM Holdings's current Gross Margin % is 97.85%, which is near median its own 10-year median of 95.64. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is ARM Holdings stock overvalued right now?
Based on GuruFocus' analysis, ARM Holdings (MEX:ARMN) is currently considered Significantly Overvalued. The stock's GF Value™ is MXN3,132.07, compared to a current price of MXN6,331.50 — trading 102.2% above its estimated fair value. The current Gross Margin % is 97.85%, which is near median its 10-year median of 95.64 and 230.5% above the Semiconductors industry median of 29.61. ARM Holdings' overall GF Score™ is 61/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For ARM Holdings (MEX:ARMN), the current Gross Margin % is 97.85% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is ARM Holdings (MEX:ARMN) Overvalued in 2026?
Based on GuruFocus' analysis, ARM Holdings stock appears to be overvalued.
The current stock price of MXN6,331.50 is trading 102.2% above its estimated GF Value™ of MXN3,132.07.
GuruFocus considers ARM Holdings to be Significantly Overvalued.
Key valuation signals for MEX:ARMN:
Gross Margin %: 97.85% (near median its 10-year median of 95.64)
GF Value™: MXN3,132.07 vs. price of MXN6,331.50 (102.2% above fair value)
Industry Position: 230.5% above the Semiconductors median (#10 of 1011)
No single metric tells the full story. See the MEX:ARMN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Arm Holdings is the IP owner and developer of the Arm architecture, which is used in 99% of the world's smartphone CPU cores. It also has high market share in other battery-powered devices like wearables, tablets, and sensors. Arm licenses its architecture for a fee, offering different types of licenses depending on the flexibility the customer needs. Customers like Apple or Qualcomm buy architectural licenses, which allow them to modify the architecture and add or delete instructions to tailor the chips to their specific needs. Other clients directly buy off-the-shelf designs from Arm. Both off-the-shelf and architectural customers pay a royalty fee per chip shipped. In 2026, Arm announced the launch of its own CPU products on top of its existing royalty business.
61GF Score
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