MVST vs. Arm Holdings: Which Tech Growth Stock is the Better Placed?

Both Microvast MVST and Arm Holdings ARM stand as key innovators in the evolving technology landscape, each driving progress in distinct yet high-growth areas.

Microvast focuses on advanced lithium-ion battery systems, emphasizing reliability, scalability and safety, while ARM dominates the semiconductor ecosystem through its processor architecture licensing model that powers billions of connected devices. Both companies are strategically positioned across transformative themes such as electrification, artificial intelligence and next-generation computing.

For investors adopting a cautious yet forward-looking stance, this comparative analysis offers valuable insights. With both stocks rated Hold, it highlights their growth potential balanced against prevailing valuation and market conditions.

The Case for Microvast

Microvast’s innovative True All-Solid-State Battery (ASSB) technology offers a safer and more efficient technology by eliminating liquid electrolytes and emphasizing scalability. This next-generation battery solution has fueled rising demand and delivered concrete performance gains for the company. In the second quarter of 2025, Microvast achieved 9.2% year-over-year revenue growth, accompanied by a 220-basis-point improvement in gross margin.

Despite substantial investments in ASSB development, the company has maintained effective expense control, resulting in stronger profitability. Its adjusted EBITDA surged to $25.9 million, a sharp turnaround from a negative $78.4 million in the same quarter last year. With safety-focused applications expanding across electric vehicles (EVs), grid storage and robotics, this advanced battery technology is expected to be a key growth driver going forward.

Further bolstering its prospects, Microvast’s Huzhou Phase 3.2 expansion plan in China aims to increase production capacity by 2 GWh, enabling large-scale manufacturing of its high-energy nickel manganese cobalt (NMC) 53.5 Ah cell technology, a move that positions the company for greater market share and long-term competitive strength.

The Case for Arm Holdings

ARM’s dominance in mobile computing remains unmatched, anchored by its power-efficient chip architectures. These designs power energy-saving devices from Apple AAPL, Qualcomm QCOM and Samsung, forming the foundation of modern mobile technology. As the demand for higher performance with lower energy consumption grows, ARM’s chips continue to lead in smartphones and tablets. Apple’s M-series chips, Qualcomm’s Snapdragon processors, and Samsung’s Exynos systems all rely on ARM’s architecture, a testament to its unrivaled blend of efficiency and performance. This synergy between innovation and practicality reinforces ARM’s enduring competitive edge.

Beyond mobile, ARM is swiftly emerging as a vital enabler of AI and IoT advancements. As Apple, Qualcomm and Samsung double down on AI-centric innovation, ARM’s adaptable, energy-efficient designs are increasingly indispensable. Its chips power everything from wearables and automotive systems to cloud infrastructure and edge devices. Apple’s next-gen silicon integrates advanced AI features, Qualcomm is enhancing on-device intelligence, and Samsung is leveraging ARM-powered solutions for smarter IoT ecosystems. With machine learning and edge computing redefining the digital landscape, ARM’s architecture is becoming the backbone of the AI-driven future.

How Do Estimates Compare for MVST & ARM?

The Zacks Consensus Estimate for Microvast’s 2025 sales is set at $462.3 million, indicating 21.7% year-over-year growth. The consensus estimate for earnings is pegged at 19 cents, suggesting a more than 100% surge from the preceding year’s actual. 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 18.1% year-over-year growth. The consensus estimate for earnings is $1.65 per share, suggesting a 1.2% year-over-year surge. 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 19.71X, which is below the 12-month median of 20.78X. Arm is trading at 85.87X, lower than the 12-month median of 123.75X. Although both stocks are trading at a discount compared with their historical valuations, MVST appears way cheaper than ARM.

Conclusion: A Balanced Hold, but Microvast Holds the Advantage

Given current market dynamics, Microvast appears better positioned. Its advancements in ASSB technology, improving profitability and relatively attractive valuation provide a stronger near-term growth narrative. Arm Holdings remains a dominant force in semiconductors, but its lofty valuation tempers upside potential. For now, both merit a Hold rating, yet Microvast’s improving fundamentals, cost discipline, and scalable expansion strategy offer a more appealing balance between growth prospects and valuation-driven stability.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research