Microvast vs. Arm Holdings: Which Tech Growth Stock is the Better Bet?

Both Microvast MVST and Arm Holdings ARM are innovators in the cutting-edge technology space. MVST focuses on innovative and reliable lithium-ion batteries equipped with advanced technologies, while Arm’s core business involves licensing its processor designs to semiconductor companies and original equipment manufacturers. Both companies surf in major tech-waves, including electrification, AI and semiconductors.

Those willing to invest in growth-driven leading technologies will benefit from this comparative analysis. It will help them make an informed decision about which stock is a better choice now.

The Case for Microvast

MVST is a frontrunner of the electrification revolution, establishing itself as a major innovator of lithium-ion batteries. From the MV-I battery to its True All-Solid-State Battery (ASSB), the company has embarked on the journey to leave its footprint in the evolving battery space.

The MV-I battery, which has an energy density of 180 Wh/kg, stands out in the electric boat market. Recognizing its potential, Evoy has partnered with the company to include MV-I in the leisure boat product line, serving new opportunities for MVST in the $7.7 billion electric boat market.

In 2024, revenues increased 23.9% year over year, mainly driven by a 41.6% rise in sales volume from 1,139.6 MWh in 2023 to 1,613.6 MWh in 2024.

Moving into the boat market, which offers the company a chance to meet the rising demand for fast-charging solutions for cargo transport, will likely increase sales volume. Therefore, expecting rapid growth in revenues is quite realistic.

Microvast True ASSB technology is instrumental in improving safety, energy density and efficiency for data center backup power systems and electric school buses, while setting the stage for robotics and EVs in the future. These innovations not only address the vital needs of the industry but also establish MVST as a major player, enabling it to capture a greater share of the battery market, which is anticipated to expand, seeing a CAGR of 16.6% between 2025 and 2034.

Meanwhile, the market in which MVST operates is cut-throat. The battery market is dominated by tech-giants including Tesla, Samsung SDI and BYD. These established names have the advantage of significant resources, brand value and an extensive supply chain, making it challenging for MVST to gain or retain market share.

To capture a larger piece of the market, the company will have to make hefty investments, distorting its ability to grow while remaining profitable.

The Case for Arm Holdings

Arm Holdings is a quintessential innovator, acting as an architectural backbone for digital services. Its power-efficient chip structure has been vital for its dominance in the mobile computing space. The company is well-known for its sleek and energy-efficient designs in Apple and Samsung devices. Within the realm of AI and the Internet of Things, ARM is turning out to be an eminent name.

Apple’s M-series chips are based on ARM’s architecture, while Samsung incorporates ARM’s designs across mobile and consumer electronics, testifying to its growing needs. Now, the question of why these tech-giants are so hip about ARM’s architecture lies within its ability to deliver high performance with minimal power consumption. These characteristics are extremely important to serve the world as it becomes more connected and intelligent.

Recently, Arm Holdings disclosed that the number of customers that use ARM-based chips in data centers has increased 14X to 70,000 since 2021. This data captures the growing need for an efficient chip architecture that ARM provides to its customers. Having said that, Arm registered record revenues crossing the $1-billion quarterly mark in the first quarter of 2025. The rising deployment of Armv9 CPUs and Compute Subsystems in chips for both smartphones and data centers fueled this growth.

However, the company has not been able to show promising growth in China, its second-largest market. The rising adoption of RISC-V, an open-source chip architecture, is one of the main reasons behind this sluggishness. The China government is keen on issuing formal guidelines aimed at promoting the widespread use of RISC-V, which will weaken ARM’s position in China.

How Do Estimates Compare for MVST & ARM?

The Zacks Consensus Estimate for Microvast’s 2025 sales is set at $466.7 million, indicating 22.9% year-over-year growth. The consensus estimate for earnings is pegged at 13 cents per share compared with the preceding year’s actual loss of 27 cents per share. There has been no change in analyst estimates or revisions lately.

The Zacks Consensus Estimate for Arm Holdings’ 2025 sales is pegged at $4.7 billion, indicating 17.1% year-over-year growth. The consensus estimate for earnings is $1.72 per share, suggesting a 5.5% year-over-year rise. There has been no change in analyst estimates or revisions lately.

MVST Trades Cheaper Than ARM

Microvast is currently trading at a forward 12-month P/E ratio of 16.44X, which is below the 12-month median of 26.78X. Arm is trading at 81.13X, lower than the 12-month median of 121.96X. Although both stocks are trading at a discount compared with their historical valuations, MVST appears way cheaper than ARM.

Verdict

Both Microvast and Arm Holdings’ deals with leading technologies often grab investors’ attention. Currently, MVST is finding itself at the threshold of multiple opportunities stemming from efficient battery technology, enabling it to navigate through the challenging market. Arm Holdings, which has a strong growth narrative, can be affected by the large-scale adoption of RISC-V, threatening its position in the China market.

Despite both stocks being fundamentally strong, MVST is a better choice for investors since it is significantly cheaper than ARM, offering investors growth opportunities.

MVST and ARM currently have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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