Which technology growth stock is better positioned?
Both Microvast MVST and Arm stocks ARM is recognized as a key innovator in the evolving technology landscape, driving progress in diverse but high-growth areas.
Microvast focuses on advanced lithium-ion battery systems, emphasizing reliability, scalability and security, while ARM dominates the semiconductor ecosystem through its processor architecture licensing model that powers billions of connected devices. Both companies are strategically positioned around transformative topics such as electrification, artificial intelligence and next-generation computing.
For investors who take a cautious yet forward-looking stance, this comparative analysis offers valuable insights. Since both stocks are rated Hold, this highlights their growth potential compared to prevailing valuation and market conditions.
Microvast's innovative True All-Solid-State Battery (ASSB) technology provides safer and more efficient technology by eliminating liquid electrolytes and emphasizing scalability. This next-generation battery solution has fueled increasing demand and provided the company with tangible performance improvements. In the second quarter of 2025, Microvast achieved year-over-year revenue growth of 9.2%, accompanied by a gross margin improvement of 220 basis points.
Despite significant investments in ASSB development, the company was able to maintain effective cost control, resulting in higher profitability. Adjusted EBITDA rose to $25.9 million, a significant turnaround from the loss of $78.4 million in the same quarter last year. As safety-focused applications expand in electric vehicles (EVs), grid storage and robotics, this advanced battery technology is expected to be a key growth driver in the future.
To further strengthen its prospects, Microvast's Huzhou Phase 3.2 expansion plan in China aims to increase production capacity by 2 GWh, enabling large-scale production of its high-energy nickel-manganese-cobalt (NMC) 53.5 Ah cell technology. This move positions the company for greater market share and long-term competitive strength.
ARM's dominance in mobile computing remains unmatched and is anchored by its power-efficient chip architectures. These designs power energy-saving devices Apple AAPL, Qualcomm QCOM and Samsung form the foundation of modern mobile technology. As demand for higher performance with lower power consumption grows, ARM's chips continue to lead the way in smartphones and tablets. Apple's M-series chips, Qualcomm's Snapdragon processors and Samsung's Exynos systems are all based on ARM's architecture, a testament to its unrivaled blend of efficiency and performance. This synergy between innovation and practicality strengthens ARM's enduring competitive advantage.
Beyond mobile, ARM is quickly becoming a key enabler of AI and IoT advancements. As Apple, Qualcomm and Samsung increase their focus on AI-centric innovation, ARM's adaptable, power-efficient designs are becoming increasingly indispensable. Its chips power everything from wearables and automotive systems to cloud infrastructure and edge devices. Apple's next-generation silicon integrates advanced AI capabilities, Qualcomm improves on-device intelligence, and Samsung leverages ARM-based solutions for smarter IoT ecosystems. As machine learning and edge computing redefine the digital landscape, ARM's architecture will become the backbone of the AI-driven future.
The Zacks Consensus Estimate for Microvast's 2025 revenue is $462.3 million, representing year-over-year growth of 21.7%. The consensus estimate for earnings is 19 cents, suggesting a year-over-year increase of more than 100%. There have been no recent changes to analyst estimates or revisions.
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The Zacks Consensus Estimate for Arm Holdings' 2025 revenue is estimated at $4.7 billion, representing year-over-year growth of 18.1%. The consensus earnings estimate is $1.65 per share, up 1.2% year-over-year. There have been no recent changes to analyst estimates or revisions.
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Microvast is currently trading at a 12-month P/E ratio of 19.71X, which is below the 12-month median of 20.78X. Arm is trading at 85.87X, below the 12-month median of 123.75X. Although both stocks are trading at a discount compared to their historical valuations, MVST appears significantly cheaper than ARM.
Given the current market dynamics, Microvast appears to be better positioned. Its advances in ASSB technology, improved profitability and relatively attractive valuation make for a stronger near-term growth narrative. Arm Holdings remains a dominant force in the semiconductor sector, but its high valuation dampens its upside potential. Both deserve a Hold rating for now, but Microvast's improving fundamentals, cost discipline and scalable expansion strategy offer a more attractive balance of growth prospects and valuation stability.
MVST and ARM each carry a Zacks Rank #3 (Hold). You can see You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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