Arm Holdings, a UK-based chip designer, is making a bold move into the artificial intelligence (AI) chip market, challenging industry leaders like Nvidia. With SoftBank's support, Arm is poised to disrupt the status quo and carve out a significant foothold in this rapidly evolving sector. The company's decision to develop and produce AI hardware marks a departure from its traditional role of licensing chip designs.

Arm's entry into AI chip production is a strategic move to ride the wave of the burgeoning AI computing market. With plans to establish an AI chip division and initiate prototype development by spring 2025, Arm is well-positioned to leverage its expertise in chip architecture and tap into the growing demand for AI-powered solutions across various industries.

The financial backing from SoftBank adds considerable weight to Arm's foray into AI chip production. With SoftBank's substantial investment and strategic vision, Arm is well-equipped to navigate the complexities of chip development and manufacturing.

As Arm Holdings continues to make headlines with its ambitious AI chip initiative, investors are left wondering if now is the right time to buy into this tech powerhouse. A technical analysis of Arm Holdings stock reveals a meteoric rise, reaching an all-time high of $164 in February 2024. Despite a recent cool-off, the stock has made a slow yet steady recovery and is expected to open above $110 on Monday.

Traders who are bullish on the stock can buy it at the open at $112 or above, keeping a stop loss at $97.5. If the stock rallies from here, they can book partial profits near $135 and hold the remaining shares for a target above $160. However, shorting the stock at current levels is not advised, and traders should exercise caution.