Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

Chip design company $Arm Holdings (ARM.US)$ Will announce its earnings after Wednesday's post-market trading, its upward trend facing a crucial test.

Arm's nearly 90% rise this year has made it one of the most expensive stocks in the market. The market expects the company's second-quarter revenue to grow by only 0.6%, which is far from the explosive growth trend of other artificial intelligence (AI) companies.

Synovus Trust's senior portfolio manager Dan Morgan said, 'Ultimately, Arm is a company with a significantly higher P/E ratio compared to Nvidia, but not with the same growth rate. It plays a crucial role in all new technologies involved with chip manufacturers, and the momentum in artificial intelligence is very strong. However, I don't know if we can prove its growth rate aligns with its P/E ratio.'$NVIDIA (NVDA.US)$ companies, but does not have the same growth rate as Nvidia. It plays a crucial role in all new technologies involved with chip manufacturers, and the momentum in artificial intelligence is very strong. However, I am uncertain if we can prove whether its growth rate matches its P/E ratio.

Arm's expected pe ratio exceeds 76 times, ranking third among component stocks, higher than nvidia's 37 times.$NASDAQ 100 Index (.NDX.US)$Arm's p/s ratio exceeds 32 times, the highest in this index so far.

David Trainer, CEO of investment research firm New Constructs, said: "Value investors' judgment on Arm is not accurate enough, so it is not surprising if this financial report serves as a real correction." He added, "Arm needs to achieve significant profit growth in the coming years to prove that this valuation is reasonable." He pointed out that Arm is in a "very competitive industry".

Analysts have differing views on Arm. According to Bloomberg's data, more than half of the analysts give the stock a 'buy' rating, but the average target price suggests a less than 2% increase in the stock over the next 12 months.

Bernstein analyst Sara Russo downgraded Arm's rating to 'underperform the large cap' last week. She said, "The long-term outlook is still very attractive, but what about the price?" Considering the stock's strong performance and valuation so far this year, "we find it difficult to find upside space."

She added that although Arm's ai-related business 'performed well,' considering cyclical headwinds, "we are concerned about non-ai business revenue."

Long-term bulls believe that over time, Arm's valuation will gradually rise. However, the company failed to raise annual sales expectations last quarter, which was disappointing. Data shows that Arm's revenue for the fiscal year 2025 is expected to grow by 23%, and by 24% in fiscal year 2026. Net income for this fiscal year is expected to nearly double, but will slow down in the following years.

Another potential issue is that Arm is canceling a license that allows long-term partners to use its intellectual property to design chips.$Qualcomm (QCOM.US)$This issue has recently put pressure on the company's stock price and may be mentioned during the financial results conference call.

Despite recent risks, Wall Street remains very optimistic about ai stocks. The recent financial reports of large tech companies confirm their commitment to investing heavily in this technology, a trend that may continue to companies like Arm. UBS Group predicts that ai-related spending by large tech companies will increase by 50% this year, reaching $222 billion, and a further 20% by 2025.

CEO Daniel Newman of The Futurum Group said, "People want to see the enthusiasm for ai turn into actual business volume, but things are moving in the right direction."

"There are valid concerns in the market about when Arm will reach the performance level corresponding to its valuation. But I am not worried, it's just a matter of time."

Editor / jayden