Canadian Halal Investor.

NASDAQ Shariah screener · October 2026

Is Arm Holdings plc (ARM) Halal?

PASS

Arm Holdings plc · NASDAQ: ARM · Technology

The short answer

Yes - Arm Holdings plc (ARM) passes this Shariah stock screen at all three gates. Arm, the Cambridge-based semiconductor designer, earns its revenue from IP licensing and per-chip royalties (FY2026 revenue $4,920M) - none of which involve alcohol, tobacco, gambling, weapons, adult entertainment, pork, or conventional finance. The financial ratios pass comfortably: the balance sheet carries no borrowings at all (0.0% of its ~$311B market cap, October 2, 2026), below the ~33% ceiling, and interest income of $111M is about 2.26% of revenue, below the 5% ceiling. Zoya independently rates Arm Shariah-compliant. This is a factual screen, not a religious ruling - consult a qualified scholar for personal rulings.

Gate 1 — Business activity: PASS

Arm Holdings plc (NASDAQ: ARM), headquartered in Cambridge, England, designs semiconductor intellectual property - processor architectures and designs that chipmakers license and build into billions of chips. Per its Form 20-F for the fiscal year ended March 31, 2026 (Commission File No. 001-41800), Arm earns two revenue streams: royalty revenue of $2,613M (per-chip royalties on partners' chips using Arm IP) and license and other revenue of $2,307M (IP licenses, software development tools, design services, training, and support), on total revenue of $4,920M. Business-screen implication (factual): both streams are semiconductor IP licensing and royalties - none involve alcohol, tobacco, gambling, weapons, adult entertainment, pork, or conventional finance. No haram segment is disclosed. Context only: the top five customers (including Arm China and SoftBank Group) account for about 57% of FY2026 revenue, with Arm China alone about 16%. Gate 1 passes. Facts only.

Gate 2 — Debt and cash: PASS

Per Arm's Form 20-F for the fiscal year ended March 31, 2026, the balance sheet carries no borrowings or debt line at all - total liabilities of $2,417M consist of accrued compensation, tax, contract liabilities, and lease liabilities only, against total shareholders' equity of $8,286M. So total interest-bearing debt is $0 - debt / market cap is 0.0% (market cap about $311B: 1,064,055,252 ordinary shares outstanding x $292.34, October 2, 2026 - each ADS represents one ordinary share), far below the ~33% ceiling. Cash and cash equivalents of $2,751M plus short-term investments of $850M ($3,601M total) is about 1.2% of market cap. Gate 2 passes. Facts only.

Gate 3 — Non-compliant income: PASS

Arm's Form 20-F for the fiscal year ended March 31, 2026 reports 'Interest income, net' of $111M as a consolidated income-statement line item (FY2025: $116M; FY2024: $110M). $111M / FY2026 total revenue of $4,920M = about 2.26% of revenue - below the 5% non-compliant income ceiling. Third-party screener Zoya independently reports the same $111M figure at 2.26% of revenue. No other material non-compliant income was identified. Gate 3 passes. Facts only.

Key figures used

Frequently asked questions

What does Arm do?

Arm Holdings plc (NASDAQ: ARM), based in Cambridge, England, designs semiconductor intellectual property (IP) - processor architectures and designs that chipmakers license and build into their chips. Per its Form 20-F for the fiscal year ended March 31, 2026, it earns two revenue streams: royalty revenue (per-chip royalties on partners' chips using Arm IP - $2,613M) and license and other revenue (IP licenses, software development tools, design services, training, and support - $2,307M). FY2026 total revenue was $4,920M. Each ARM American Depositary Share represents one ordinary share.

Why does Arm pass this Shariah stock screen?

Arm passes all three gates of this Shariah stock screen. Gate 1 (business activity): semiconductor IP licensing and royalties involve no alcohol, tobacco, gambling, weapons, adult entertainment, pork, or conventional finance - a clean business. Gate 2 (debt): Arm carries no borrowings at all - 0.0% of market cap, below the ~33% ceiling. Gate 3 (non-compliant income): interest income of $111M is about 2.26% of FY2026 revenue ($4,920M), below the 5% ceiling. Result: PASS. This is a factual screen, not a religious ruling - consult a qualified scholar for personal rulings.

What is Arm's interest-bearing debt ratio?

Per Arm's Form 20-F for the fiscal year ended March 31, 2026 (Commission File No. 001-41800), the balance sheet carries no borrowings or debt line at all - total liabilities of $2,417M are accrued compensation, tax, contract liabilities, and lease liabilities only, against total shareholders' equity of $8,286M. So debt / market cap is 0.0%, far below the ~33% ceiling. Cash and cash equivalents of $2,751M plus short-term investments of $850M ($3,601M total at March 31, 2026) is about 1.2% of market cap. Gate 2 passes. Facts only.

How much interest income does Arm earn?

Arm's Form 20-F for the fiscal year ended March 31, 2026 reports a consolidated income-statement line item of 'Interest income, net' of $111M (FY2025: $116M; FY2024: $110M). $111M / FY2026 total revenue of $4,920M = about 2.26% of revenue, below the 5% non-compliant income ceiling. Third-party screener Zoya independently reports the same $111M figure at 2.26% of revenue. Gate 3 passes. Facts only.

Do Zoya, Musaffa, or ShariaPortfolio cover Arm?

Zoya covers Arm at zoya.finance/stocks/arm and rates it Shariah-compliant / halal to invest in under AAOIFI guidelines, reporting interest income of $111M against $4,920M of revenue (2.26%). Musaffa's Academy list of large-cap semiconductor stocks (dated June 2024) lists ARM (NASDAQ) as 'Halal' - a dedicated Musaffa stock page for the ARM ticker could not be pulled via search, so a fresh Musaffa rating could not be confirmed and is honestly reported as unconfirmed. ShariaPortfolio: no Arm coverage was found in targeted searches - honestly reported as no coverage found, not invented.

Sources

Screened 2026-10-02 from published company figures and market data. Figures change; this page is educational, not financial advice and not a religious ruling.

Screened with our two-gate Shariah screening methodology (business-activity gate, then AAOIFI-style financial ratios).