ARM vs. MSFT

Last updated Jun 13, 2026

ARM (Arm Holdings plc American Depositary Shares) and MSFT (Microsoft Corporation) are both stocks. Both are in the Technology sector — ARM in Semiconductors, MSFT in Software - Infrastructure. Over the past year, ARM returned 180.94% vs -17.07% for MSFT. At a 0.38 correlation, their price movements are largely independent.

Performance

ARM vs. MSFT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Arm Holdings plc American Depositary Shares (ARM) and Microsoft Corporation (MSFT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ARM achieves a 248.38% return, which is significantly higher than MSFT's -18.85% return.

ARM

• 1D: 11.27%
• 1M: 82.07%
• YTD: 248.38%
• 6M: 190.94%
• 1Y: 180.94%
• 3Y*: —
• 5Y*: —
• 10Y*: —

MSFT

• 1D: 0.10%
• 1M: -7.19%
• YTD: -18.85%
• 6M: -17.98%
• 1Y: -17.07%
• 3Y*: 6.16%
• 5Y*: 9.56%
• 10Y*: 24.39%

*Multi-year figures are annualized to reflect compound growth (CAGR)

ARM vs. MSFT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023
ARM Arm Holdings plc American Depositary Shares	248.38%	-11.39%	64.16%	33.95%
MSFT Microsoft Corporation	-18.85%	15.58%	12.93%	12.12%

Correlation

The correlation between ARM and MSFT is 0.21, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.21
Correlation (All Time) Calculated using the full available price history since Sep 14, 2023	0.38

The correlation between ARM and MSFT shifts across timeframes, from 0.21 (1 year) to 0.38 (all time), reflecting how their relationship changes across market environments.

Fundamentals

Market Cap ARM : $406.71B MSFT : $2.91T
EPS ARM : $0.85 MSFT : $16.79
PE Ratio ARM : 449.79 MSFT : 23.27
PEG Ratio ARM : 15.43 MSFT : 1.63
PS Ratio ARM : 82.64 MSFT : 9.16
PB Ratio ARM : 49.08 MSFT : 7.02
Total Revenue (TTM) ARM : $4.92B MSFT : $318.27B
Gross Profit (TTM) ARM : $4.66B MSFT : $217.41B
EBITDA (TTM) ARM : $1.37B MSFT : $200.96B

Return for Risk

ARM vs. MSFT — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

ARM

ARM Risk / Return Rank: 90
ARM Sharpe Ratio Rank: 94
ARM Sortino Ratio Rank: 91
ARM Omega Ratio Rank: 90
ARM Calmar Ratio Rank: 90
ARM Martin Ratio Rank: 86

MSFT

MSFT Risk / Return Rank: 17
MSFT Sharpe Ratio Rank: 13
MSFT Sortino Ratio Rank: 15
MSFT Omega Ratio Rank: 14
MSFT Calmar Ratio Rank: 24
MSFT Martin Ratio Rank: 20

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

ARM vs. MSFT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Arm Holdings plc American Depositary Shares (ARM) and Microsoft Corporation (MSFT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	ARM	MSFT	Difference
Sharpe ratio: Return per unit of total volatility	2.55	-0.70	+3.25
Sortino ratio: Return per unit of downside risk	3.16	-0.84	+4.00
Omega ratio: Gain probability vs. loss probability	1.40	0.89	+0.51
Calmar ratio: Return relative to maximum drawdown	4.24	-0.53	+4.77
Martin ratio: Return relative to average drawdown	8.33	-1.08	+9.41

ARM vs. MSFT - Sharpe Ratio Comparison

The current ARM Sharpe Ratio is 2.55, which is higher than the MSFT Sharpe Ratio of -0.70. The chart below compares the historical Sharpe Ratios of ARM and MSFT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

ARM vs. MSFT - Drawdown Comparison

The maximum ARM drawdown since its inception was -53.97%, smaller than the maximum MSFT drawdown of -69.38%. Use the drawdown chart below to compare losses from any high point for ARM and MSFT.

Drawdown Indicators

	ARM	MSFT	Difference
Max Drawdown Largest peak-to-trough decline	-53.97%	-69.38%	+15.41%
Max Drawdown (1Y) Largest decline over 1 year	-41.47%	-33.91%	-7.56%
Max Drawdown (3Y) Largest decline over 3 years	—	-33.91%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-37.15%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-37.15%	—
Current Drawdown Current decline from peak	-7.53%	-27.46%	+19.93%
Average Drawdown Average peak-to-trough decline	-21.33%	-21.78%	+0.45%
Ulcer Index Depth and duration of drawdowns from previous peaks	21.07%	16.48%	+4.59%

Volatility

ARM vs. MSFT - Volatility Comparison

Arm Holdings plc American Depositary Shares (ARM) has a higher volatility of 37.22% compared to Microsoft Corporation (MSFT) at 10.52%. This indicates that ARM's price experiences larger fluctuations and is considered to be riskier than MSFT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ARM	MSFT	Difference
Volatility (1M) Calculated over the trailing 1-month period	37.22%	10.52%	+26.70%
Volatility (6M) Calculated over the trailing 6-month period	58.04%	22.31%	+35.73%
Volatility (1Y) Calculated over the trailing 1-year period	68.92%	25.42%	+43.50%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	76.58%	26.66%	+49.92%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	76.58%	27.06%	+49.52%

Dividends

ARM vs. MSFT - Dividend Comparison

ARM has not paid dividends to shareholders, while MSFT's dividend yield for the trailing twelve months is around 0.91%.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ARM Arm Holdings plc American Depositary Shares	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
MSFT Microsoft Corporation	0.91%	0.70%	0.73%	0.74%	1.06%	0.68%	0.94%	1.20%	1.69%	1.86%	2.37%	2.33%

Financials

ARM vs. MSFT - Profitability Comparison

The chart below illustrates the profitability comparison between Arm Holdings plc American Depositary Shares and Microsoft Corporation over time, highlighting three key metrics: Gross Profit Margin, Operating Margin, and Net Profit Margin.

ARM - Gross Margin

Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, Arm Holdings plc American Depositary Shares reported a gross profit of 1.39B and revenue of 1.49B. Therefore, the gross margin over that period was 93.1%.

MSFT - Gross Margin

Gross margin is calculated as gross profit divided by revenue. For the three months ending on Jun 2026, Microsoft Corporation reported a gross profit of 56.06B and revenue of 82.89B. Therefore, the gross margin over that period was 67.6%.

ARM - Operating Margin

Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, Arm Holdings plc American Depositary Shares reported an operating income of 440.00M and revenue of 1.49B, resulting in an operating margin of 29.5%.

MSFT - Operating Margin

Operating margin is calculated as operating income divided by revenue. For the three months ending on Jun 2026, Microsoft Corporation reported an operating income of 38.40B and revenue of 82.89B, resulting in an operating margin of 46.3%.

ARM - Net Margin

Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, Arm Holdings plc American Depositary Shares reported a net income of 313.00M and revenue of 1.49B, resulting in a net margin of 21.0%.

MSFT - Net Margin

Net margin is calculated as net income divided by revenue. For the three months ending on Jun 2026, Microsoft Corporation reported a net income of 31.78B and revenue of 82.89B, resulting in a net margin of 38.3%.

Frequently Asked Questions

Can I hold both ARM and MSFT in my portfolio?

ARM and MSFT have a correlation of 0.21, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, ARM or MSFT?

ARM has higher volatility (37.22%) compared to MSFT (10.52%). In terms of maximum drawdown, ARM dropped -53.97% vs MSFT's -69.38%.

Which has better risk-adjusted returns?

ARM currently has the higher Sharpe Ratio (2.55 vs -0.70), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.