Arm se stále víc posouvá od smartphonů k datovým centrům a čipům pro AI. Ve 1. čtvrtletí fiskálního roku 2027 tržby vzrostly na 1,289 miliardy USD, meziročně o 22,41 %.
Arm's smartphone empire built one of tech's most recognizable businesses, but the company's next billion-dollar bet is pointing somewhere else entirely, and the valuation debate it has sparked puts bulls and bears in direct conflict.
Our Arm (NASDAQ:ARM | ARM Price Prediction) thesis has shifted. Data center CPUs, agentic AI silicon, and the Arm AGI CPU are now the swing factors driving this stock, and our model reflects that pivot.
The 24/7 Wall St. price target for Arm is $264.43 over the next 12 months, versus a current price of $257. That implies 3.17% upside, and our recommendation is hold with high confidence at 90%. Arm is executing well, but the current valuation already prices in a lot of the AI narrative.
24/7 Wall St. Price Target Summary Metric Value Current Price $257.00 24/7 Wall St. Price Target $264.43 Upside 3.17% Recommendation HOLD Confidence Level 90% A Data Center Story Wrapped in a Smartphone Wrapper ARM has ripped higher, up 135.11% year to date and 89.7% over the past year, though shares are down 6.4% over the past month. The most recent Q1 FY2027 report showed revenue of $1.289 billion, up 22.41% year over year, beating consensus.
Royalty revenue reached $715 million and license revenue reached $574 million. CEO Rene Haas told the BBC this week that AI will cure cancer in our lifetime, underlining how aggressively management is positioning Arm as an AI infrastructure company rather than a mobile IP licensor.
The clearest signal came from the July call. Haas said “The pace at which Arm is becoming the CPU foundation for AI infrastructure is accelerating”, and management confirmed Arm AGI CPU customer demand has grown to more than $2 billion, versus the initial $1 billion opportunity.
Why Bulls See a Breakout Past $400 The bull case rests on the data center CPU inflection. Neoverse shipments have surpassed 1.5 billion cores, with the most recent 500 million shipping in just nine months. Data center royalty revenue more than doubled year over year again in Q1.
Management sees the CPU total addressable market at $100 billion plus, with some industry estimates as high as $220 billion. The same buildout is lifting the power, cooling, and networking names we profiled in a free report on seven AI infrastructure suppliers that aren’t chipmakers.
If Arm AGI CPU margins climb toward the 50% gross target and hyperscaler wins with Meta, Google Axion, Microsoft Cobalt, and NVIDIA Vera continue, our bull case price target of $414.56 becomes plausible.
What Could Go Wrong The bear case is anchored in valuation. ARM trades at a trailing P/E of 298, and the Q1 GAAP EPS of $0.25 missed the $0.4038 estimate. Operating margin compressed to 7% from 11%.
The reported EPS was pressured by $128 million in unrealized equity gains and $343 million of SBC tied to heavy R&D investment for the AGI CPU ramp. Add the Qualcomm litigation trial expected in Q4 2026, China exposure, and export controls, and our bear case lands at $212.11.
How Arm Compares to NVIDIA and Qualcomm NVIDIA (NASDAQ:NVDA) is the natural comparison because Arm’s data center thesis is directly tied to NVIDIA’s Vera CPU roadmap and Grace Blackwell platform. The stock trades at a P/E of 46 with a net margin of 55.6% and Q2 FY2027 data center revenue of $89.023 billion. NVIDIA looks cheap relative to Arm on P/E, which makes our $264 target on ARM look full rather than conservative.
Qualcomm (NASDAQ:QCOM) is the closest smartphone-to-data-center pivot comparable. QCOM trades at a P/E of 33 with a 2.11% dividend yield and a stated target of $40 billion in non-handset revenues by fiscal 2029. Against QCOM’s diversification at a fraction of the multiple, Arm’s premium valuation looks aggressive. The peer set suggests our target is fair.
Arm Price Prediction 2026-2030 Our 24/7 Wall St. price target is $264.43 with a hold rating and 90% confidence. The key factor tipping the scale is valuation. The $210 to $220 range is where forward P/E math becomes more supportive.
Key risks to monitor include AGI CPU margins slipping below the high-30s target and the Qualcomm trial creating licensing uncertainty. Arm is a high-quality company trading at a full valuation.
Year 24/7 Wall St. Price Target 2026 $264 2027 $285 2028 $298 2029 $306 2030 $314 These projections assume Arm continues executing on AGI CPU production and hyperscaler wins. Significant upside or downside could result from Arm AGI CPU margin trajectory and the outcome of the Qualcomm trial.
Contact [email protected] for any questions or corrections.
Arm uzavřel se Samsungem dohodu o 2nm on-device AI accelerator SoC pro zařízení, která má posílit inferenci v telefonech a spotřební elektronice. Nejde ale o datacentrový průlom, na který investoři čekají.
Arm's new Samsung chip deal looks like a data center breakthrough, but the business investors are actually paying 298 times earnings for operates on completely different terrain from where this partnership lands.
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Arm Holdings (NASDAQ:ARM | ARM Price Prediction) is pushing deeper into AI silicon through a new collaboration with Samsung on a 2nm on-device AI accelerator SoC, with Arm supplying the AI accelerator architecture and core design IP while Samsung’s System LSI division handles full SoC integration and its foundry manufactures the chip on the SF2 2nm process. Investors reading the headline as a data center breakout are misreading the deal. The Samsung tie-up targets power-efficient, low-latency inference on phones and consumer devices to reduce cloud dependence, a high-volume but lower-margin segment. Arm’s actual data center bet is the AGI CPU, where CEO Rene Haas said demand now exceeds $2 billion across fiscal 2027 and fiscal 2028. That is the number to benchmark against the incumbents.
Arm: On-Device Wins Are Real, Data Center Ambitions Are Bigger The Samsung SoC extends Arm’s reach in mobile inference, but the strategic pivot investors are paying for lives in the data center. Arm’s fiscal Q1 2027 delivered revenue of $1.29 billion, up 22.4% year over year, with royalty revenue of $715 million outpacing licensing. On the earnings call, Haas said data center royalty revenue more than doubled year over year once again and that Arm Neoverse shipments have surpassed 1.5 billion cores. Management now targets a $15 billion silicon business against a data center TAM cited at more than $100 billion by 2030.
The bull case: Arm sits inside NVIDIA’s Vera CPU, Google’s Axion, Microsoft’s Cobalt, and Amazon’s Graviton 5, giving it approximately 50% CPU compute share among top hyperscalers. The risk is margin. Arm’s own AGI CPU gross margin is guided to the high 30% range, maybe low 40s for the first generation, a step down from its 92.5% IP-licensing gross margin. The stock is priced for perfection at a P/E of roughly 298, after a 130.62% year-to-date run to $252.09. And the Qualcomm license litigation trial expected Q4 2026 hangs over the royalty base.
NVIDIA: The Incumbent Arm Has to Coexist With, Not Displace NVIDIA (NASDAQ:NVDA) remains the incumbent Arm must coexist with. Its fiscal Q2 2027 revenue reached $96.22B, up 105.8% year over year, with Data Center revenue of $89.02B. Jensen Huang said demand is growing 100% year over year while NVIDIA expects to fulfill approximately 70% of that demand because of supply constraints. Revenue opportunity per gigawatt is stepping up from roughly $18 billion on Hopper to $40 billion on Vera Rubin.
Critically for the Arm thesis, NVIDIA’s Vera CPU is itself Arm-based. Grace CPU revenue already exceeded $5 billion on a trailing twelve-month basis, and NVIDIA sees demand for approximately 20 billion in total server CPUs. The bull case for NVDA is a platform moat that keeps expanding into CPUs, networking, and financing. The risk is customer concentration and geopolitics: NVIDIA assumes no China Data Center compute revenue in its Q3 guidance, and supply obligations have surged to $279B. Shares trade at a P/E of roughly 46 after gaining 23.67% year to date.
Taiwan Semiconductor: The Toll Booth Every Architecture Pays Taiwan Semiconductor Manufacturing (NYSE:TSM) fabricates the leading-edge silicon for NVIDIA’s Rubin, Arm’s AGI CPU partners, and Qualcomm’s hyperscaler custom chips. Q2 2026 revenue reached $40.2 billion, up 36.0% year over year, with advanced nodes at 77% of wafer revenue and 2nm debuting at 3% of wafer revenue in its first ramp quarter. Full-year 2026 revenue is expected to grow slightly above 40% in US dollar terms.
Management said high-performance computing represented 66% of revenue and cited a resurgence in the role of CPUs in AI data centers, singling out agentic workloads. Notably, Samsung’s SF2 node is competing for the same generation of AI silicon. That partial disintermediation of TSMC is the strategic subplot behind the Arm-Samsung deal. The bull case is unavoidable throughput: whoever wins the accelerator war, most of the wafers ship from TSMC. The risk is 2nm ramp cost, guided to dilute Q3 gross margin by about 3 to 4 percentage points, plus Taiwan Strait geopolitical exposure. Shares are up 41.85% year to date to $428.91.
Qualcomm: The Peer Entering Data Center Through the Same Door Qualcomm (NASDAQ:QCOM) is Arm’s closest strategic analog and its most direct new-entrant competitor in AI data center compute. Fiscal Q3 2026 revenue was $9.95B, down 4.0% year over year, with non-GAAP EPS of $2.21. CEO Cristiano Amon confirmed that two near-term custom-silicon wins will begin generating revenue in the December quarter, both with global scale hyperscalers. Management is guiding to $5 billion in fiscal 27 data-center revenue and $15 billion in fiscal 29, with the Arm-based Dragonfly C1000 as its merchant CPU entry.
The bull case: automotive already grew 61% year over year for 23 consecutive quarters of double-digit growth, and hyperscaler custom silicon opens a second engine. The risks are cost and legal exposure. The data-center ramp is guided as a drag of 1.5% to 2% on weighted-average QCT gross margin. The Arm license dispute, with a trial expected Q4 2026, could reshape the economics of Qualcomm’s Arm-based server chips. Shares are essentially flat year to date at up 0.21%, trading at a P/E of roughly 33.
What It All Means The Samsung SoC deal expands Arm’s mobile inference footprint and gives Samsung Foundry a real 2nm reference design, though it stops short of the AGI CPU opportunity. Investors underwriting Arm at 298 times earnings are paying for the data center silicon business, where the incumbent shipped $89 billion in a single quarter and the closest peer is guiding to $15 billion by fiscal 2029. Arm’s on-device wins are additive to a larger data center story. The competitive gravity of the data center still points through NVIDIA’s platform and TSMC’s fabs (we reverse-engineered what the biggest AI chip winners looked like early in a free playbook here: The Next Nvidia Playbook).
Contact [email protected] for any questions or corrections.
Arm očekává významné tržby z AGI CPU od fiskálního roku 2028, s růstem na zhruba 15 miliard USD do fiskálního roku 2031. Firma uvádí, že tento krok nenahradí její stávající IP a Compute Subsystems.
Key Takeaways Arm expects meaningful AGI CPU revenues in FY'28, accelerating to about $15B by FY'31.ARM says most CPU chips already rely primarily on its IP, supporting its position in the AGI CPU market.Arm does not expect the AGI CPU push to displace its existing IP and Compute Subsystems operations. Arm Holdings (ARM - Free Report) planned entry into the artificial general intelligence CPU market could become a major revenue catalyst. The opportunity began with demand from new customers, suggesting the market is pulling the initiative rather than ARM pushing it.
The company believes it holds a distinctive position because most CPU chips are already based primarily on its intellectual property. Meaningful AGI CPU revenues are expected to begin in fiscal 2028 before accelerating sharply to approximately $15 billion by fiscal 2031. That trajectory would establish a sizable new business within only a few years.
Crucially, management does not expect the AGI CPU push to displace Arm Holdings’ existing IP and Compute Subsystems operations. If that expectation holds, the planned CPU business could add a fresh revenue stream while preserving the economics of Arm Holdings’ established model. Execution will matter, since the forecast assumes a steep scale-up after meaningful sales begin.
How Do Two Computing Peers Compare?NVIDIA (NVDA - Free Report) is one peer investors may track as ARM’s CPU expansion takes shape. NVIDIA provides a computing reference point, but the supplied outlook offers no direct operating comparison. For ARM, the key measure versus NVIDIA will be whether customer demand develops into the projected fiscal 2031 revenue ramp.
Intel (INTC - Free Report) is another relevant peer as Arm moves closer to selling complete CPU products. Intel’s presence sharpens attention on execution, although the image does not provide peer-level forecasts. Arm’s progress relative to Intel will depend on reaching meaningful revenues in 2028 without weakening its current IP and CSS businesses during the planned ramp.
ARM’s Price Performance, Valuation and EstimatesThe stock has surged a massive 115% year to date, significantly outperforming the industry’s 24% rally.
Image Source: Zacks Investment Research
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 35.78X, well above the industry’s 4.87X. It carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has increased over the past 60 days.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arm Holdings má ve fiskálním 2. čtvrtletí očekávaný růst tržeb o 21 % na 1,37 miliardy USD a upraveného EPS o 23 % na 48 centů na akcii. Akcie se ale obchodují za více než 93násobek zisku, výrazně nad Synopsys na 24násobku a Cadence Design Systems na 35násobku.
Key Takeaways Arm Holdings is expected to post 21% revenue growth and 23% adjusted EPS growth in fiscal Q2.AI, data-center and smartphone demand could lift royalties as advanced architectures support licensing.Arm Holdings trades above 93X earnings, far above Synopsys at 24X and Cadence Design Systems at 35X. Arm Holdings (ARM - Free Report) appears positioned to deliver another strong quarter, but its elevated valuation leaves little room for execution missteps.
The Zacks Consensus Estimate for the company’s fiscal second-quarter revenues is $1.37 billion, indicating 21% year-over-year growth. Royalty revenues could accelerate sequentially as artificial intelligence, data-center and smartphone demand support wider adoption of Arm-based technology. Licensing revenues may also benefit from new agreements and customers adopting more advanced architectures.
Image Source: Zacks Investment Research
The consensus mark for fiscal second-quarter adjusted earnings stands at 48 cents per share, indicating 23% year-over-year growth. Stronger-than-expected revenues could provide operating leverage and lift adjusted earnings. Full-year earnings could consequently approach $2.20 per share, up 24% year over year. With gross margin exceeding 98% in the fiscal first quarter, operating expenses will remain a crucial determinant of profitability. Research and development investments are likely to rise sharply, while selling, general and administrative costs should also increase.
Image Source: Zacks Investment Research
ARM’s financial position remains another notable strength. The company exited the previous quarter with approximately $3.06 billion in cash and no debt. Free cash flow could reach the mid-$1 billion range this year, although that would still represent a yield of only about 0.5% at the current valuation.
Synopsys and Cadence Design Systems Offer Valuation ContextSynopsys (SNPS - Free Report) trades at roughly 24 times forward earnings, while Cadence Design Systems (CDNS - Free Report) commands about 35 times. Although Arm Holdings’ profitability can justify a premium to Synopsys, its multiple of more than 93 times earnings appears excessive. Cadence Design Systems also benefits from durable semiconductor-design demand, yet remains substantially cheaper. Compared with Synopsys and Cadence Design Systems, ARM’s valuation assumes exceptionally favorable growth for years while making the stock vulnerable to a sharp correction and offering investors an inadequate margin of safety.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AI accelerators receive the headlines, but nearly every expanding computing system still pays Arm for architecture. Summary
Raymond James’ target offers approximately 11% upside from Tuesday’s price.
Arm Holdings ARM, the chip-architecture powerhouse sitting at the heart of smartphones and data centers, climbed approximately 2.3% to $244.27 Tuesday morning. Investor's Business Daily reported that Raymond James maintained its Outperform rating and boosted its price target to $272, betting that agentic AI will ignite another wave of server-CPU demand.
The growth is already landing. Arm's fiscal first-quarter revenue soared 22% to a record $1.29 billion. Royalty revenue jumped 22% to $715 million, licensing revenue surged 23% to $574 million and data-center royalties more than doubled. Better still, customer demand for the new Arm AGI CPU has already cleared $2 billion across fiscal 2027 and 2028.
Now comes the valuation test. Raymond James' $272 target leaves roughly 11.4% upside from the current price, suggesting plenty of AI optimism is already baked in. Arm's royalty model is a beauty because it can win across multiple competing chipmakers, but investors are paying up for that advantage. The shares trade 28.12% above their $190.65 GF Value estimate, leaving little room for data-center momentum to cool.
Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Arm Holdings uvedla, že pipeline poptávky po AGI CPU přesáhl 2 miliardy USD pro fiskální roky 2027 a 2028, tedy dvojnásobek oproti předchozímu kvartálu. To potvrzuje posun od licencování k čipům pro datová centra.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) story is straightforward: a licensing business is turning into a data center silicon business. On the fiscal Q1 2027 call, CEO Rene Haas doubled the customer demand pipeline for the Arm AGI CPU to more than $2 billion across FY2027 and FY2028, up from the $1 billion opportunity flagged a quarter earlier. That is the AI signal driving this call.
Our 24/7 Wall St. price target for Arm is $284.95, pointing to modest upside from the current $271.43 price. That is a hold at 90% confidence. Arm is executing, but valuation already discounts much of the story.
24/7 Wall St. Price Target Summary Metric Value Current Price $271.43 24/7 Wall St. Price Target $284.95 Upside 4.98% Recommendation HOLD Confidence Level 90% From $109 to a June Blowoff and Back Arm has had a volatile 2026. Shares are up 148.31% year to date after starting at $109.31, peaked in June at $412.55, then gave back roughly a third of that move.
The most recent quarter reinforced the two-track story: revenue of $1.289 billion grew 22.4% and beat consensus, while GAAP EPS of $0.25 missed the $0.40 consensus estimate as R&D climbed to $838 million. Data center royalties again more than doubled year over year.
Why Bulls See a Breakout to $428 The bull case gets Arm to $428.74 in twelve months, a 57.96% total return. The mechanics: AGI CPU shipments crossing 10% of revenue, first-generation gross margins landing in the high 30% to low 40% range with a path to 50%, and continued royalty ramp from NVIDIA’s Vera, Google’s Axion, AWS Graviton 5, and Microsoft Cobalt.
Haas told investors that “AI is changing where and how compute happens, and Arm is at the center of it,” and pointed to a data center CPU TAM that peers now peg up to $200 billion. Analyst distribution supports this lean, with 27 buy or strong buy ratings against just two sells.
What Could Go Wrong The bear case takes Arm to $226.47, a -16.56% return. Smartphone royalty growth was cut to high teens from the prior 20% expectation as memory-driven BOM inflation pressures every handset tier.
The Qualcomm trial hits Q4 2026, and Arm China concentration plus U.S. export controls remain overhangs. Operating margin compressed to 7% from 11%. Bulls counter, fairly, that margin compression reflects deliberate R&D investment, with FY2026 non-GAAP R&D up 43% to fund the AGI CPU roadmap that just doubled its pipeline.
How Arm Compares to NVIDIA, Broadcom, and Qualcomm Arm’s forward P/E of 127 is the outlier of the AI silicon complex. NVIDIA (NASDAQ:NVDA) trades at 25 forward earnings with 85.2% revenue growth and a 65.6% operating margin. NVIDIA is both a customer and the yardstick, making Arm’s multiple hard to defend on pure growth.
Broadcom (NASDAQ:AVGO) is the closest custom-silicon comp, with 47.9% revenue growth and a 21 forward P/E. Qualcomm (NASDAQ:QCOM), Arm’s largest licensee and litigation counterparty, sits at 16 forward earnings. Against this field, our $284.95 target is generous and effectively assumes Arm’s AGI CPU narrative delivers.
Company Forward P/E Revenue Growth YoY Arm 127 22.4% NVIDIA 25 85.2% Broadcom 21 47.9% Qualcomm 16 -4.0% Arm Price Prediction 2026-2030 Hold at 90% confidence, with a 24/7 Wall St. price target of $284.95. The setup improves materially if AGI CPU shipments start disclosing at 10%+ of revenue with gross margin already in the low 40s.
The thesis weakens if Q2 royalty growth misses the low to mid teens guidance or the Qualcomm ruling breaks against Arm. The $2 billion signal is real. The stock is priced for it.
Year 24/7 Wall St. Price Target 2026 $272 2027 $285 2028 $305 2029 $325 2030 $340 These projections assume Arm executes on the AGI CPU roadmap and smartphone royalties normalize back to 20%+ growth by FY2028. Meaningful upside or downside could come from the Qualcomm verdict and the pace of NVIDIA Vera and AWS Graviton 5 deployments.
Contact [email protected] for any questions or corrections.
Arm Holdings v červenci klesl o 34 %, protože investoři zpochybnili trvání AI boomu a ocenění akcie bylo podle analytiků napjaté. Čtvrtletní výsledky i výhled ale byly lepší než čekání.
Shares of Arm Holdings (ARM -0.26%) were pulling back last month on broader concerns about the AI boom, and as the stock may have gotten overheated in the second quarter.
Chip stocks fell broadly last month as investors questioned the durability of the AI boom, including whether hyperscalers would earn a return on investment for the massive capital expenditures they are pouring into AI infrastructure.
According to data from S&P Global Market Intelligence, the stock finished the month down 34%. As you can see from the chart below, Arm fell in tandem with the VanEck Semiconductor ETF, though it experienced an outsize decline due to its high valuation.
ARM data by YCharts
What happened with Arm There was relatively little company-specific news out on Arm last month, with the exception of its earnings report at the end of the month, which actually sent the stock higher.
Several Wall Street analysts adjusted their price targets and ratings on the stock over the course of the month. HSBC lowered its rating from buy to hold with a price target of $315, primarily on valuation concerns. The firm noted that the surge in the stock that followed the "Arm Everywhere" event in March, when it launched its new AGI CPU, meant its long-term growth is already priced in.
Other comments also noted that capacity constraints could hold back the company's growth over the coming quarters, as well as weakness in the smartphone market, pressuring its growth.
In its fiscal first-quarter earnings report, the company edged out estimates on the top and bottom lines with solid growth in both royalties and licensing revenue. Data center royalty revenue more than doubled once again, and that segment is on its way to becoming Arm's biggest, topping smartphones.
Second-quarter guidance was also better-than-expected, and the stock bounced the next day with the help of the rally in the AI sector after Ken Griffin's Citadel bought a portfolio of AI stocks valued at more than $10 billion from Situational Awareness, which was facing a margin call.
Image source: The Motley Fool.
What's next for Arm Arm is set to begin shipping the new AGI CPU in the fiscal fourth quarter, which ends in March. That will be a big test for the company, and the stock could jump if the rollout goes well. Demand is already outstripping supply, and the company guided to $15 billion in CPU revenue and $25 billion in overall revenue in fiscal 2031. It also forecast adjusted earnings per share of $9 that year.
How Arm performs relative to that forecast will determine how the stock does over the coming years. The next few quarters should offer some key clues where it's headed.
HSBC Holdings is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Arm Holdings and VanEck ETF Trust-VanEck Semiconductor ETF. The Motley Fool has positions in and recommends Arm Holdings. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
Arm uvedl, že je nyní jistější v dosažení více než 1 miliardy USD tržeb ze serverových CPU ve fiskálním roce 2028. Zároveň ve fiskálním 1. čtvrtletí zvýšil tržby o 22 % na 1,29 miliardy USD.
It's been a rollercoaster ride for Arm Holdings (ARM -0.77%) shares this year. The stock has more than doubled in 2026, although it is off nearly 50% from its spring highs. More recently, the company got a lift on solid fiscal first-quarter earnings and upbeat commentary about its data center central processing unit (CPU) opportunity.
Despite the company's CPU opportunity, I wouldn't be chasing the stock. Let's dig into the U.K.-based company's recent results and prospects to see why I feel this way.
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CPU opportunity in focus Arm shocked investors earlier this year when it announced that it would make its own physical chips for the first time ever, given the huge opportunity it sees in server CPUs. The company has long been a leading provider of intellectual property (IP) to the semiconductor industry, but it's never developed its own chips.
That changed when it introduced its Arm Artificial General Intelligence (AGI) CPU in March. At the time, the company projected that the data center CPU market would grow to $100 billion by 2031 and that it would be able to capture a 15% market share. Nvidia and Advanced Micro Devices, meanwhile, have more recently projected that the server CPU market would climb to $220 billion.
Arm also targeted $1 billion in server CPU revenue between fiscal 2027 and fiscal 2028. On its earnings conference call, management said it was now more confident that it would achieve over $1 billion in server CPU revenue in fiscal 2028, as its backlog has grown to over $2 billion and it has seen improved supply chain conditions. The company also said that it had secured the manufacturing capacity to help meet demand.
Arm's core business, meanwhile, remained solid in fiscal Q1. Revenue increased 22% to $1.29 billion, while annualized contract value (ACV), which smooths out license revenue, rose 13%. License revenue climbed by 23% year over year to $574 million, fueled by demand for its next-generation architecture. Softbank contributed $193 million in revenue.
Royalty revenue increased by 22% year over year to $715 million. Arm said data center royalty revenue once again doubled and that it was seeing sustained momentum. Growth was being led by hyperscalers ramping up production of Arm-based server chips, while it was also seeing strength in data processing units (DPUs) and SmartNICs. Smartphone and other device revenue grew despite overall market weakness, due to higher royalty rates coming from its newer Armv9 architecture.
Looking ahead, Arm forecasts fiscal second-quarter revenue to come in around $1.38 billion, representing year-over-year growth of 22%. License revenue is projected to grow about 30%, while royalty revenue is expected to rise in the low teens. It guided for adjusted earnings per share to be between $0.43 and $0.51.
Image source: The Motley Fool.
Arm is looking to have its cake and eat it too in the server CPU market. The company already supplies the IP behind custom data center CPUs, like Nvidia's Vera, Amazon's Graviton, and Alphabet's Axion chips.
Meanwhile, it's now offering its own server CPUs, looking to capture more share in this fast-growing market. With the rise of AI agents expected to shrink the GPU-to-CPU ratio from 8:1 for training to 1:1 for agentic AI, the data center CPU market is expected to grow rapidly in the coming years. However, Arm is now essentially competing with its own customers, which does create an interesting dynamic.
One of the biggest issues for Arm in this new endeavor is being able to get components and foundry capacity, but it looks like it has done a good job on this front. However, it does still have a headwind in its largest end market, smartphones. Smartphones and other device sales are expected to be pressured due to elevated memory costs leading to higher prices, cutting consumer demand.
With the stock trading at a forward price-to-earnings (P/E) ratio of over 100 based on the fiscal 2027 consensus estimates, this AI stock is too rich for my blood given the risks involved. The move to creating physical chips could also eventually lead to multiple compression in the stock, given that it is no longer a pure IP company.
Citi potvrdila pro Arm hodnocení Buy a cílovou cenu 300 USD, protože firma podle ní zůstává klíčovým beneficientem růstu AI infrastruktury. Výsledky překonaly odhady a silná cloudová AI a licencování vyvážily slabší výhled pro handsets.
Arm Holdings PLC (NASDAQ:ARM) remains well positioned to benefit from long-term AI infrastructure growth, according to Citi, which reiterated its ‘Buy’ rating and $300 price target while modestly increasing its fiscal 2027 forecasts following the company's latest quarterly results.
Shares of Arm added more than 7% to trade hands at $241 on Thursday afternoon.
The analysts wrote that the quarter was stronger than expected, with revenue and profit exceeding consensus estimates and second-quarter guidance coming in ahead of Wall Street forecasts.
They added that strength in cloud AI and licensing more than offset a softer handset outlook, which was pressured by demand and product mix.
Reflecting the results, Citi raised its fiscal 2027 revenue estimate by 1% and its EBIT forecast by 4%, although Daswani noted that changes to the firm's longer-term projections remain modest.
The analyst also highlighted management's comments on growing demand for AGI-related CPUs, noting the company increased its addressable market outlook to more than $2 billion and reported improving visibility into that opportunity.
Despite only modest changes to its long-term estimates, Citi maintained its constructive stance on the stock, writing that Arm remains "a key AI infrastructure beneficiary" and that the recent pullback in the shares represents "an enhanced opportunity."
Arm Holdings plc (ARM) Q1 2027 Earnings Call July 29, 2026 5:00 PM EDT
Company Participants
Ian Thornton - Vice President of Investor Relations
Rene Haas - CEO & Director
Jason Child - Executive VP & CFO
Conference Call Participants
Joseph Quatrochi - Wells Fargo Securities, LLC, Research Division
Sebastien Cyrus Naji - William Blair & Company L.L.C., Research Division
Gary Mobley
Thomas O'Malley - Barclays Bank PLC, Research Division
Vivek Arya - BofA Securities, Research Division
Vijay Rakesh - Mizuho Securities USA LLC, Research Division
Yu Shi - Needham & Company, LLC, Research Division
Kinney Chin - TD Cowen, Research Division
Timm Schulze-Melander - Rothschild & Co Redburn, Research Division
Presentation
Operator
Good day and thank you for standing by. Welcome to the Arm First Quarter Fiscal Year 2027 Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ian Thornton, Vice President of Investor Relations.
Ian Thornton
Vice President of Investor Relations
Thank you, and welcome to our first quarter fiscal '27 earnings call. On the call are Rene Haas, Arm's Chief Executive Officer; and Jason Child, Arm's Chief Financial Officer. Today's call contains forward-looking information about the company and its financial results. While these statements represent our best current judgment, our business is subject to many risks and uncertainties that could cause actual results to differ materially.
Important risk factors that may affect our business and future financial results are described in our annual report on Form 20-F filed with the SEC. Arm assumes no obligation to update any forward-looking statements. We will also refer to non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in our shareholder letter as can a discussion of certain projected
Arm odhaduje výnosy za 2. čtvrtletí na 1,38 miliardy USD, nad odhadem 1,34 miliardy USD, díky silné poptávce po AI čipech. Zisk na akcii čeká 47 centů oproti 43 centům.
SummaryCompaniesSecond-quarter revenue forecast at $1.38 billion versus $1.34 billion estimateSecond-quarter adjusted profit forecast is 47 cents per share versus 43 cents estimateFirst-quarter royalties rise 22% to $715 million while licensing revenue grows 23% to $574 millionJuly 29 (Reuters) - Arm Holdings , signaled strong demand from AI on Wednesday, yet shares slid 8% after hours in choppy trade even though the intellectual property and chip designer forecast second-quarter revenue above Wall Street estimates.
The boom around AI and more recently the demand for agents - programs that can act with little or no human direction - has boosted demand for Arm's chip architecture, which powers an increasing number of data center central processing units (CPUs). Cloud giants such as Alphabet (GOOGL.O), opens new tab and Amazon.com (AMZN.O), opens new tab build custom AI chips, which have boosted the company's licensing revenue and royalties as more complex chips are shipped to data centers.
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"The more inference workloads you run, that creates work that only CPUs can do," Arm CEO Rene Haas told Reuters.
Inference refers to the process of generating an answer when a user queries a chatbot such as Anthropic's Claude.
Arm sells intellectual property that other chip companies license and pay royalties on for each unit shipped, but has recently decided to make its own central processing unit for the data center.
Higher demand from big tech company chips, along with new entrants such as Nvidia (NVDA.O), opens new tab and its Vera processor, helped the company report higher-than-expected revenue, Haas said. Qualcomm also launched its C1000 data center chip, which does not contribute to Arm revenue now but will in the future, he said.
Haas said the company has shipped 1.5 billion Arm cores for the data center — an important data-crunching portion of each chip — in the last six years, but about 30% were shipped in the last nine months.
"Growth is accelerating," Haas said.
Revenue from royalties rose 22% to $715 million in the first quarter, while licensing revenue increased 23% to $574 million.
The company's spending plans and forecast remain unchanged, finance chief Jason Child said during a conference call on Wednesday.
Arm expects smartphone royalties to drop next quarter and forecast second-quarter growth of roughly 10% and 15%, Child said.
POWER-EFFICIENT DESIGNSArm's chip designs are prized for their power efficiency, a critical advantage for data center operators looking to manage the soaring energy costs and heat generated by running massive AI models.
Its AGI CPU, a new AI data center chip unveiled in March, is exceeding initial expectations, with demand surpassing $2 billion across fiscal years 2027 and 2028, the company said. It has already delivered the product to multiple customers.
Cloud firm Oracle (ORCL.N), opens new tab has agreed to buy the new chip, Haas said. The CEO did not disclose the contract value.
"We have new customers in North America and China," Haas said, adding that the company can now secure supply for more than $1 billion worth of chips.
"I feel better about (supply) than I did 90 days ago," he said.
Jefferies analysts forecast sales of the new chip reaching $18 billion in fiscal 2031, surpassing the chip designer's own projection of $15 billion. Haas said the company was not changing any forecasts on Wednesday.
Arm projected second-quarter revenue of $1.38 billion, above analysts' average estimate of $1.34 billion, according to data compiled by LSEG.
The British chip designer expects second-quarter profit of 47 cents per share, adjusted for stock compensation, among other things, compared with analysts' expectations of 43 cents per share.
The company reported revenue of $1.29 billion and adjusted per-share earnings of 45 cents for the first quarter. Analysts expected revenue of $1.26 billion and adjusted profit of 40 cents a share.
Reporting by Juby Babu in Mexico City; Editing by Sahal Muhammed and Rod Nickel and David Gregorio
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron’s magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.
Arm vykázal rekordní první čtvrtletí: zisk 45 centů na akcii i tržby 1,29 miliardy USD překonaly odhady. Firma zároveň čeká ve druhém čtvrtletí tržby 1,33 až 1,48 miliardy USD.
Editor’s Note: This article has been updated to correct Arm’s second-quarter revenue guidance.
ARM stock is moving. Watch the price action here. Arm Q1 Details Arm reported quarterly earnings of 45 cents per share, which beat the consensus estimate of 40 cents by 12.5%, according to Benzinga Pro data.
Quarterly revenue of $1.29 billion beat the analyst estimate of $1.26 billion. Royalty revenue grew 22% to $715 million, with data center royalties more than doubling year over year. Licensing revenue reached $574 million, up 23% year over year.
“Arm delivered a record first quarter, reflecting strong execution across our business and growing demand for the Arm compute platform as AI expands across cloud infrastructure, edge devices and the physical world,” said CEO Rene Haas in a letter to shareholders.
Looking AheadArm expects second quarter adjusted EPS of 43 cents to 51 cents, versus the 43 cent analyst estimate, and revenue in a range of $1.33 billion to $1.48 billion, versus the $1.34 billion estimate.
ARM Stock Price Activity: According to data from Benzinga Pro, Arm stock was down 0.52% to $223.23 in Wednesday’s extended trading.
Photo: Shutterstock
Market News and Data brought to you by Benzinga APIs
Arm Holdings dnes po uzavření trhu oznámí hospodářské výsledky za 1. čtvrtletí fiskálního roku 2027; analytici očekávají tržby 1,26 miliardy USD a EPS 0,40 USD. Akcie za poslední měsíc klesly o 26,78 %.
Live Coverage Updates appear automatically as they are published.
Live Updates Pinned 42 minutes ago
Live
This live blog is being updated by Thomas Richmond, a 24/7 Wall St. contributor. You’ll get expert analysis of ARM’s earnings.
Simply stay on this page, and new updates will appear below automatically. We expect Arm Holdings to release earnings shortly after 4:05 p.m. ET.
23 minutes ago
Live
What Guidance Would Actually Move the Stock Tonight, investors are going to be watching the company’s full-year framing. Wall Street’s Q1 FY27 consensus sits at $1.27 billion in revenue and $0.36 EPS, just above management’s own guide of $1.26 billion ± $50 million and $0.40 ± $0.04.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) typically guides conservatively in ranges and has beaten revenue while occasionally missing EPS as R&D climbed 43% YoY to $1,911 million.
Investors want commentary on royalty growth (Jason Child flagged “roughly 20-ish percent for the year”), AGI CPU customer commitments above $2 billion, and operating margin after compression from 52.8% to 49.1%.
Bullish: a raised FY27 outlook and expanded hyperscaler wins.
Bearish: soft Q2 guide, deeper margin compression, or another RPO decline beyond 7%.
25 minutes ago
Live
With Arm Holdings (NASDAQ:ARM) down 26.78% over the past month and Polymarket pricing a 94.6% beat probability, here are some of the top questions analysts might have for management.
Top 5 Analyst Questions Why does Q1 guidance imply a sequential drop to $1.26 billion from Q4’s $1.49B? Update on $2 billion AGI CPU demand and the Meta co-development roadmap? Royalty rate trajectory as Armv9 and CSS ramp? When does R&D (+43% YoY) stop compressing operating margin? Qualcomm/Nuvia trial exposure and China revenue visibility? Key Topics to Address RPO declining 7% YoY DreamBig integration and silicon strategy Hyperscaler share (~50%) and Google Axion, Microsoft Cobalt, NVIDIA Vera ramps Buzzwords to Listen For Agentic AI, AGI CPU, Neoverse, CSS, hyperscaler, silicon business Red Flags Margin compression without royalty acceleration Soft FY2027 commentary Full-chain put/call ratio at 1.26 signals hedging 1 hour ago
Live
Arm Holdings reports fiscal Q1 2027 results tonight following a sharp selloff in the past month. Management guided revenue to approximately $1.26 billion and non-GAAP EPS to $0.40, while Polymarket traders assign a 93.9% probability of an earnings beat.
The real test is whether royalty growth and hyperscaler design wins can support the stock. Arm’s valuation rests on the belief that AGI CPUs, Neoverse, and Armv9 can transform its licensing model into a dominant data center compute franchise.
A clean beat with stronger FY 2027 commentary would reinforce the AI thesis and suggest the recent drawdown went too far. Any softness in royalty rates, margins, or hyperscaler momentum would hand the narrative to skeptics calling for a much deeper rerating.
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Arm Holdings (NASDAQ:ARM) reports fiscal Q1 2027 results after the market closes today at 4:05 PM ET. Shares currently trade around $233, testing investor conviction in the AI data center thesis CEO Rene Haas has built.
Momentum Meets a Rerating Arm closed FY26 strong. Q4 revenue hit $1.49B, up 20.06% YoY, and non-GAAP EPS came in at $0.60, beating the $0.5793 consensus. License revenue jumped 29% to $819M while royalties rose 11% to $671M, with data center royalty more than doubling. Full-year free cash flow skyrocketed 395.51% to $882M.
Since then, sentiment has cooled. Shares have dropped 15.53% over the past week and 30.23% over the past month, though ARM remains up 123.9% year to date. Non-GAAP operating margin compressed from 52.8% to 49.1% as R&D climbed 43% YoY to $1.911B, a tension I’ll be watching tonight.
Consensus Estimates Metric Q1 FY27 Consensus YoY Change Management Guide Revenue $1.265B +20% $1.26B ± $50M EPS (Non-GAAP) $0.4019 +15% $0.40 ± $0.04 Consensus sits right on management’s midpoint, meaning any surprise flows from mix, not the top line. Sell-side estimates are pretty much right in line with management’s guidance. That leaves royalty rate expansion and operating leverage as the swing factors on the bottom line.
Data Center Traction and Margin Discipline in Focus I will be watching four items tonight.
First, Arm AGI CPU traction. Management disclosed over $2B in customer demand across FY27-FY28, with Meta as lead co-developer. Any expansion of that pipeline reshapes the data center narrative.
Second, royalty mix. Data center royalty more than doubled last quarter. I will focus on whether Armv9 adoption and Neoverse deployments keep lifting the effective royalty rate, and how SAP’s Graviton migration and Cloudflare’s global rollout convert to units.
Third, operating margin. Analysts will be looking at whether Haas commits to margin recovery in FY27 or defends continued investment in the $100B+ 2030 data center opportunity.
Fourth, guidance credibility. Three consecutive EPS misses in Q1 through Q3 FY26 preceded the Q4 beat. I will be watching how management frames the FY27 outlook, ACV (last at $1,660M, up 22% YoY), and the $15B silicon forecast. Overhangs include the Qualcomm trial in Q4 calendar 2026 and the 25% U.S. semiconductor tariff.
Earnings History Quarter EPS Surprise Day-Of Move 1-Week Move 30-Day Move Q4 FY26 +3.57% -10.11% +7.12% +52.29% Q3 FY26 -48.68% +5.70% +10.20% +8.72% Q2 FY26 -33.69% -1.21% -11.34% -10.31% Q1 FY26 -0.31% -13.44% -4.11% -6.39% On average, shares moved +0.47% seven days after earnings over the past year.
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Arm Holdings zveřejní výsledky za 1. čtvrtletí 29. července; trh čeká, zda aktualizace k AGI CPU podpoří akcii. Firma už má u čipu závazky za 2 miliardy USD.
Arm Holdings (Nasdaq: ARM) has been one of several breakout chip stocks this year.
The company, best known for licensing its CPU designs, is up 142% this year, including a substantial pullback from its June peak. At one point, the stock was up more than 300%.
Arm has benefited from the bullish sentiment in the chip sector from the AI boom, as well as signs that CPU demand is soaring as AI needs shift from training to inference. The company also announced that it would make its own silicon for the first time, designing the Arm AGI CPU, which is expected to start contributing to revenue in its fiscal fourth quarter, which ends in March 2027.
The company has said it expects the new CPU chip to drive $15 billion in revenue by fiscal 2030, and it expects total revenue of $25 billion then, a significant acceleration from the $1.05 billion it generated in fiscal 2026.
Arm is set to report first-quarter earnings on July 29. Will the stock jump on the news? Let’s take a closer look at what to expect.
Image source: The Motley Fool.
The good news for ArmThe arms race for AI computing power has continued over the last three months, and the early signs are that capital expenditures for AI infrastructure, such as chips, are continuing to rise. Alphabet is the only one of the four major hyperscalers to have reported earnings this quarter, and the company raised its capex forecast for this year from $180 billion-$190 billion to $195 billion-$205 billion, reflecting accelerating growth in its cloud computing division.
Capex increases from other cloud companies seem likely as well, and that favors Arm, whose designs are found in data center chips like Google Axion, Microsoft Cobalt, and Amazon Graviton, the three leading cloud computing companies.
Arm earns revenue in two ways: licensing and royalties. Royalty revenue is mostly predictable, so the variability in the company’s results tends to come from licensing. The continued growth in AI spending bodes well for new license sales.
Finally, investors will be keen for updates on the AGI CPU. Arm has already said that it sold out its initial capacity for the chip, hitting $2 billion in commitments just weeks after the launch, double its initial forecast. Any updates on that are likely to move the stock. A production delay, for example, would send shares falling, while a more optimistic outlook would please investors.
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One thing to rememberEven after falling by more than a third from its June peak, Arm is still an expensive stock, trading at a price-to-sales ratio of 56. That reflects its unique high-margin licensing model and the expected windfall from the AGI CPU. The valuation could put downward pressure on the stock, especially as shares have already soared this year, largely based on forward expectations around AI sentiment and the AGI CPU.
Arm stock also tends to be erratic following earnings. In the past, the stock has fallen after hours, seemingly based on guidance or a cautious comment from management, only to rally during the regular trading session.
In other words, investors should expect volatility following the earnings release. Based on the tailwinds in AI and Arm’s competitive advantage in power-efficient CPU technology, the components are there for a post-earnings pop. If it doesn’t happen on Wednesday, Arm still looks like a smart bet for the long term as it moves into silicon with the AGI CPU.
Key Takeaways ARM is expected to post double-digit revenue and earnings growth in its fiscal first quarter.ARM has topped earnings estimates in each of the past four quarters, but the model does not predict a beat.ARM's AI strengths are offset by a premium valuation, supporting a Hold stance ahead of earnings. Arm Holdings plc (ARM - Free Report) will report its first-quarter fiscal 2027 results on July 29, after the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at 40 cents, indicating a 14.3% year-over-year increase. The consensus mark for revenues is pegged at $1.27 billion, indicating a 20.3% year-over-year increase.
Image Source: Zacks Investment Research
The company has a strong history of earnings surprises. Earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average earnings surprise of 7.4%.
There have been no revisions for the upcoming quarter's earnings estimate in the past 30 days.
Image Source: Zacks Investment Research
Our Model Does Not Predict a BeatOur proven model doesn’t conclusively predict an earnings beat for ARM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
ARM has an Earnings ESP of -1.06% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Royalty and License Should Drive ARM’s Top LineWe expect year-over-year improvement in the company’s top line in the to-be-reported quarter to be driven by an increase in both Royalty and License revenues. The consensus estimate for Royalty revenues is pegged at $707.1 million, suggesting a 20.9% year-over-year decline. The consensus estimate for License and other revenues is pegged at $560.4 million, indicating a 19.7% year-over-year decline.
Price Surge, Elevated ValuationARM stock has climbed 138% over the past six months, making valuations high. ARM currently trades at a lofty forward 12-month price-to-earnings multiple of 107.76X, more than four times the industry average of 25.97, suggesting the stock remains far from inexpensive.
Image Source: Zacks Investment Research
Investment Considerations Tilted to HoldArm Holdings continues to strengthen its long-term investment case through its dominant processor ecosystem, expanding role in artificial intelligence infrastructure and growing adoption among leading cloud providers. Its architecture remains deeply embedded across mobile computing while new AI initiatives create meaningful opportunities beyond its traditional licensing business. However, much of this optimism already appears reflected in the stock's premium valuation, leaving limited room for disappointment if industry demand softens or growth moderates. Given its outstanding fundamentals but elevated valuation, ARM appears best suited as a Hold, with investors waiting for an attractive entry point before adding to positions.
Peer ViewNVIDIA (NVDA - Free Report) dominates the AI accelerator market with its GPUs and networking platforms. Unlike Arm Holdings, which primarily generates revenue through licensing and royalties, NVIDIA designs and sells complete hardware and software solutions. While NVIDIA's growth is driven by direct chip sales, ARM benefits as more semiconductor companies adopt its CPU architecture to develop AI-optimized processors, making the two companies complementary in many AI deployments rather than direct competitors.
Advanced Micro Devices (AMD - Free Report) competes in CPUs, GPUs and data center processors, focusing on designing and selling semiconductor products. ARM, in contrast, licenses its processor architecture to a broad ecosystem of chipmakers. As demand for custom AI chips and energy-efficient computing grows, AMD competes through product innovation, while ARM benefits from broader adoption of its intellectual property across multiple customers and end markets.
Jefferies zvýšila cílovou cenu Arm na 320 USD z 290 USD díky silnější poptávce po AI pracovních zátěžích. Očekává, že tržby z AI CPU dosáhnou ve fiskálním roce 2031 18 miliard USD.
Arm Holdings PLC (NASDAQ:ARM)'s long-term growth outlook is improving as rising demand for artificial intelligence workloads drives increased need for CPUs, according to Jefferies, which raised its price target on the semiconductor designer to $320 from $290.
The company’s shares are up almost 150% so far this year, trading hands at $272 on Monday afternoon.
Jefferies wrote that Arm’s AI-related CPU opportunity has expanded following the company’s fiscal 2026 results, driven by growing demand from agentic AI applications and new customer additions including Oracle and ByteDance. The firm now expects Arm’s AI CPU revenue to reach $18 billion in fiscal 2031, above the company’s guidance of $15 billion.
The analyst firm noted that the total addressable market for CPUs could reach $200 billion by 2030, up from an earlier estimate of more than $100 billion. Jefferies expects Arm’s AI CPUs to capture at least a 15% share of that market, with Meta projected to become the company’s largest customer, followed by OpenAI, Oracle and ByteDance.
Jefferies also raised its estimates for AI CPU revenue in fiscal 2028 and fiscal 2029, forecasting $1.5 billion and $3 billion, respectively, compared with previous estimates of $1.4 billion and $2.7 billion. The firm wrote that Arm could increase production capacity through higher-cost wafer supply options, which may weigh on gross margins but help the company secure market share.
The firm highlighted data centre as another area of potential growth, with royalty revenue expected to benefit from increasing adoption of Arm-based infrastructure. Jefferies noted that Arm’s compute subsystem-based royalties have increased to $1.50 per core from $1 previously.
Jefferies also pointed to a potential AI accelerator launch from SoftBank using Arm’s design services as a potential future royalty opportunity. The firm wrote that royalties from such products could exceed $7,000 per chip given the high average selling prices of GPUs, although volumes remain difficult to predict.
The firm expects Arm’s revenue and earnings to grow at more than 40% annually through fiscal 2031, with Jefferies forecasting a five-year earnings per share compound annual growth rate of 45%. Jefferies wrote that the company’s growth visibility and exposure to AI-driven CPU demand could support outperformance relative to the broader semiconductor sector.
The revised price target is based on a fiscal 2031 price-to-earnings multiple of 29 times, with Jefferies also citing discounted cash flow analysis as support for its valuation.
Šéf Arm Holdings Rene Haas řekl, že AI boom brzdí nedostatek čipů, datových center, energie a kvalifikovaných pracovníků, který může trvat ještě 2 až 3 roky. Zároveň uvedl, že datová centra se mají stát největším segmentem firmy velmi brzy.
The artificial intelligence boom is being held back by what the industry cannot build rather than what customers will not buy, according to Rene Haas, chief executive of Arm Holdings PLC (NASDAQ:ARM), the chip designer.
Haas told CNBC that demand for chips, data centres, energy and skilled workers is running ahead of available capacity, creating a bottleneck he expects to persist for the next two to three years.
He was speaking in an interview at the Pennsylvania Defense and Innovation Summit, hosted by Senator Dave McCormick.
ARM designs the chip architectures that other companies license and manufacture, a position that gives it an unusually wide view of who is trying to build what.
Haas said the company expects its data-centre business to become its largest segment "very soon", overtaking the mobile phone market that built it.
That claim is the more interesting half of the interview.
ARM's designs dominate smartphones, where power efficiency is everything, and the same constraint now governs data centres, where the binding limit is increasingly electricity rather than silicon.
The supply-constrained framing also cuts against the bubble argument that has unsettled markets in recent months.
A bubble is a demand problem in which buyers pay for something they do not need.
A shortage is the opposite, and Haas is describing customers who cannot get what they are already willing to pay for.
Shares fell 5% on the session, an awkward backdrop for a chief executive describing demand as robust.
One reading is that investors are less worried about whether the demand exists than about who captures the value if the bottlenecks are physical, since power stations and skilled engineers are not things a design company can conjure.
ARM těží z širšího přijetí Armv9 a Compute Subsystems, což zvyšuje licenční příjmy i licenční poplatky. Firma zároveň rozšiřuje svou AI strategii prostřednictvím Arm AGI CPU.
Key Takeaways ARM is benefiting from the wider adoption of Armv9 and Compute Subsystems.Arm's royalty business remains durable, with nearly half of revenue from products launched over a decade ago.ARM is broadening its AI strategy with the Arm AGI CPU to expand beyond traditional licensing. Arm Holdings (ARM - Free Report) is well-positioned to benefit from the next phase of AI adoption as customers increasingly require more advanced chip architectures. While the company's licensing and royalty model has long been a competitive advantage, the opportunity is expanding as customers adopt Armv9 and Compute Subsystems (CSS).
More sophisticated designs enable ARM to capture greater value from every chip shipped through higher royalty rates and deeper customer integration. The company's royalty stream is also highly durable, with nearly half of current royalty revenue still generated by products introduced more than a decade ago.
Looking ahead, the introduction of the Arm AGI CPU further broadens monetization opportunities by enabling ARM to participate more directly in cloud AI infrastructure rather than relying solely on intellectual property licensing.
Arm vs. Semiconductor IP PeersCompared with semiconductor IP peers Synopsys (SNPS - Free Report) and Cadence Design Systems (CDNS - Free Report) , ARM is uniquely positioned to benefit from rising AI compute demand through multiple revenue streams. While Synopsys and Cadence Design Systems primarily generate software and design-automation revenue, ARM participates in licensing, recurring royalties, and, increasingly, higher-value AI compute solutions.
As AI workloads become more complex, Synopsys, Cadence Design Systems and ARM are all expected to benefit from semiconductor innovation. However, ARM's expanding royalty economics, growing adoption of CSS, and entry into AI-focused processors provide growth avenues that differentiate it from Synopsys and Cadence Design Systems, strengthening its long-term competitive position.
ARM’s Price Performance, Valuation and EstimatesThe stock has surged a massive 153% year to date, significantly underperforming the industry’s 44% rally.
Image Source: Zacks Investment Research
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 44.93X, well above the industry’s 8.84X. It carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has declined over the past 30 days.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arm klesl v úterý o více než 6 % poté, co HSBC snížila rating na Hold kvůli omezené kapacitě foundry, která má brzdit růst zisků. Cílovou cenu ale zvýšila na 315 USD z 255 USD.
Arm Holdings shares fell more than 6% on Tuesday after HSBC downgraded the chip designer to Hold, saying foundry capacity constraints are likely to limit earnings upside despite the company's strong long-term growth prospects.
The brokerage still raised its price target to $315 from $255.
With Arm trading around $286, HSBC sees upside over the longer term but believes much of the company's growth story has already been reflected in its share price.
“We have previously flagged that Arm’s entry into merchant server CPUs and higher server CPU royalties could be transformative,” HSBC analyst Frank Lee wrote in a note to clients.
According to HSBC, investor enthusiasm around Arm's server CPU ambitions has exceeded expectations since the company's Arm Everywhere event in March.
“The market reaction to the merchant server CPU narrative has exceeded our expectations, with the stock trading +122% since the Arm Everywhere event on 24 March (vs. SOX +57% during the same period)," Lee said.
"With management targeting $25B of revenue and $9 non-GAAP EPS by FY31E, we think the shares already price-in strong long-term growth, trading at an expensive 139x/95x 2026e/2027e PE. We therefore roll our valuation forward to FY29e, which drives our target price revision. However, foundry capacity bottlenecks limit near-term earnings upside, so we downgrade to Hold.”
Lee added that additional foundry capacity remains the primary catalyst for further upside but appears unlikely in the near future.
“Given incremental foundry capacity allocation being the primary upside catalyst, which we believe is unlikely, we downgrade to Hold due to limited earnings upside potential.”
The downgrade marks a reversal from HSBC's stance in March, when it double-upgraded the stock from Reduce to Buy while lifting its price target to $205 from $90.
At the time, the brokerage argued that Arm was transitioning from a smartphone-focused licensing company into a major supplier of CPU architecture for AI servers and remained undervalued.
Other analysts remain bullishNot all brokerages share HSBC's cautious view.
Last month, Bernstein analyst David Dai raised the firm's price target on Arm to $500 from $300 while maintaining an Outperform rating.
Dai described Arm as a structural beneficiary of the "renaissance of CPUs for agentic AI," citing the architecture's power efficiency and the company's evolution from an intellectual property licensor into a CPU developer.
TD Cowen also lifted its price target to $475 from $265 while reiterating a Buy rating, reflecting confidence that AI-driven computing demand will continue to support the stock.
Separately, Arm announced an expanded partnership with semiconductor technology provider Arteris to strengthen processor security.
Arteris said Arm will continue integrating its Cycuity Radix technology into processor core development to enhance semiconductor security assurance.
Arteris Chief Executive K. Charles Janac said that by leveraging the company's technology, Arm is building more rigorous security capabilities at a time when semiconductor cybersecurity is becoming increasingly important for electronic systems, including data centres.
Shares of Arteris rose more than 3% following the announcement.
Arm Holdings ve fiskálním 4. čtvrtletí 2026 zvýšil tržby meziročně o 20 % na 1,49 miliardy USD. Tahounem byl licenční segment, který vzrostl o 29 % na 819 milionů USD.
Key Takeaways ARM's total revenues increased 20% year over year to $1.49 billion in fiscal Q4 2026.Licensing and other revenues surged 29% to $819 million.Royalty revenues grew 11% to $671 million on Armv9 adoption, Arm CSS and expanding data center deployments. Arm Holdings (ARM - Free Report) continues to capitalize on robust demand for its semiconductor intellectual property, with its latest quarterly results highlighting licensing as a key growth engine.
In the fourth quarter of fiscal 2026, total revenues climbed 20% year over year to $1.49 billion. While the royalty business remained a significant contributor, licensing and other revenues once again delivered the strongest growth, underscoring sustained customer demand for ARM’s technology.
The company continues to benefit from rising investments in artificial intelligence, cloud computing, mobile devices and custom silicon. As chipmakers increasingly design specialized processors for AI workloads and high-performance computing, ARM’s architecture has become an essential foundation for product development, supporting a healthy pipeline of new licensing agreements and long-term customer relationships.
Licensing and other revenues surged 29% year over year to $819 million, making it the primary driver of ARM’s top-line expansion during the quarter. Growth was supported by previously signed agreements, as well as the timing of several high-value licensing contracts.
Meanwhile, ARM’s royalty business continued to provide a stable stream of recurring revenues. Royalty revenues increased 11% year over year to $671 million, driven by broader adoption of Armv9, increasing deployment of Arm Compute Subsystems (CSS), and the growing use of Arm-based processors in data center infrastructure.
For investors, the takeaway is straightforward: strong licensing demand continues to strengthen Arm Holdings’ competitive position. As customers accelerate investments in AI infrastructure and next-generation computing, ARM appears well-positioned to benefit from a growing pipeline of licensing opportunities while simultaneously expanding its high-margin royalty base, providing multiple long-term drivers of sustainable growth.
How Arm Holdings Stacks Up Against Key U.S. PeersNVIDIA (NVDA - Free Report) dominates the AI accelerator market with its GPUs and networking platforms. Unlike Arm Holdings, which primarily generates revenue through licensing and royalties, NVIDIA designs and sells complete hardware and software solutions. While NVIDIA's growth is driven by direct chip sales, ARM benefits as more semiconductor companies adopt its CPU architecture to develop AI-optimized processors, making the two companies complementary in many AI deployments rather than direct competitors.
Advanced Micro Devices (AMD - Free Report) competes in CPUs, GPUs and data center processors, focusing on designing and selling semiconductor products. ARM, in contrast, licenses its processor architecture to a broad ecosystem of chipmakers. As demand for custom AI chips and energy-efficient computing grows, AMD competes through product innovation, while ARM benefits from broader adoption of its intellectual property across multiple customers and end markets.
ARM’s Price Performance, Valuation and EstimatesThe stock has surged a massive 175% year to date, significantly underperforming the industry’s 46% rally.
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From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 49.11X, well above the industry’s 9.13X. It carries a Value Score of F.
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The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has declined over the past 30 days.
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ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arm Holdings ve 4. čtvrtletí fiskálního roku 2026 zvýšila výnosy o 20 % na 1,49 miliardy USD. Tahounem byl licenční byznys, jehož výnosy vzrostly o 29 % na 819 milionů USD.
Key Takeaways ARM generated 20% year-over-year revenue growth in the fourth quarter of fiscal 2026.Licensing and other revenues climbed 29%, highlighting strong customer demand for ARM's intellectual property.Royalty revenues advanced 11%, supported by wider adoption of Armv9 technology and data center processors. Arm Holdings (ARM - Free Report) continues to capitalize on robust demand for its semiconductor intellectual property, with its latest quarterly results underscoring the growing importance of its licensing business as a key growth engine.
In the fourth quarter of fiscal 2026, total revenues increased 20% year over year to $1.49 billion. Although royalties remain a significant contributor to the company's business model, licensing and other revenues once again delivered the strongest growth, reflecting healthy customer demand for ARM's processor designs.
The results illustrate the expanding adoption of the company's architecture across multiple high-growth markets. As semiconductor manufacturers increasingly develop custom chips for artificial intelligence, cloud infrastructure, smartphones and other advanced computing applications, ARM's technology continues to serve as a critical foundation for next-generation processor development. This trend is supporting a steady pipeline of new licensing agreements and strengthening long-term customer relationships.
Licensing momentum has become an increasingly important contributor to the company's overall financial performance. Licensing and other revenues rose 29% year over year to $819 million during the quarter, providing a significant boost to overall revenue growth. The improvement was supported by contributions from previously executed agreements as well as the signing of several large licensing contracts during the period.
At the same time, ARM's royalty business continues to generate a dependable stream of recurring revenues. Royalty revenues increased 11% from the prior-year period to $671 million, driven by broader deployment of Armv9 architecture, increasing adoption of Arm Compute Subsystems, and expanding use of Arm-based processors across data center workloads.
For investors, the latest results reinforce the strength of ARM's business model. Continued demand for new licensing agreements, combined with an expanding royalty base, provides multiple avenues for sustained long-term growth. As investments in artificial intelligence infrastructure and advanced computing continue accelerating, Arm Holdings appears well-positioned to benefit from both increasing design wins and higher royalty generation.
How ARM Stacks Up Against Key Semiconductor PeersAmong leading semiconductor companies, NVIDIA ((NVDA - Free Report) continues to dominate the AI accelerator market with its powerful GPU ecosystem, while Advanced Micro Devices (AMD - Free Report) has steadily expanded its presence across AI computing, data centers and high-performance processors. Unlike NVIDIA and Advanced Micro Devices, which primarily generate revenue through semiconductor sales, ARM operates a licensing-based business model that enables broad adoption of its processor architecture across the industry. As more chipmakers build products around ARM's designs, the company benefits from both upfront licensing fees and recurring royalty income, giving it a differentiated and highly scalable growth model within the semiconductor sector.
ARM’s Price Performance, Valuation and EstimatesThe stock has surged a massive 188% year to date, significantly outperforming the industry’s 51% rally.
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From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 51.41X, well above the industry’s 9.51X. It carries a Value Score of F.
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The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has remained unchanged over the past 30 days.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ARM rozšiřuje z licencování čipů do AI infrastruktury s novým AGI CPU a získává širší podporu u hyperscalerů včetně NVIDIA a Google. Za rok akcie vzrostly o 118 %.
Key Takeaways ARM is expanding beyond chip licensing with the AGI CPU to target AI infrastructure workloads.Arm is seeing broader adoption across hyperscalers, with support from NVIDIA, Google, and other partners.ARM trades at 57.93X forward sales, reflecting high expectations despite strong AI growth prospects. Arm Holdings plc (ARM - Free Report) shares have surged 118% over the past year, outperforming the semiconductor industry's impressive 83% gain.
The stock has benefited from growing investor optimism surrounding artificial intelligence, cloud computing, and next-generation semiconductor infrastructure. While much of the AI rally has centered on GPU leaders, ARM is steadily strengthening its position as the foundational architecture powering a growing share of AI-enabled devices and data centers. Its expanding software ecosystem, deepening partnerships with hyperscalers and ambitious push into AI infrastructure continue to reinforce the company's long-term growth story.
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ARM's Expanding Ecosystem Creates a Powerful Competitive MoatARM has built one of the semiconductor industry's strongest competitive advantages through a deeply interconnected ecosystem linking software developers and hardware manufacturers. This two-sided network has evolved into a durable competitive moat that becomes stronger as adoption continues to expand.
The company's architecture has become the preferred standard for device manufacturers because of its broad compatibility with leading operating systems, including Android, iOS, Windows and Linux. This extensive software support gives hardware manufacturers confidence that Arm-based processors will seamlessly run widely used applications, developer tools, and enterprise software across multiple computing environments.
The benefits extend equally to software developers. As more hardware companies adopt Arm's architecture, developers gain immediate access to an enormous installed base of devices, creating greater incentives to optimize applications for Arm-powered systems. Every additional hardware partner strengthens the software ecosystem, while broader software compatibility attracts even more hardware manufacturers.
This self-reinforcing cycle has helped ARM establish an exceptionally strong competitive position. The company's intellectual property now powers nearly every smartphone globally, creating significant barriers for competitors seeking to challenge its dominance in mobile CPU architecture.
AI Infrastructure Opens a New Growth AvenueWhile Arm Holdings has traditionally been known for licensing its processor designs, the company is increasingly expanding its presence across AI infrastructure. Its newly introduced Arm AGI CPU has been specifically designed to address the emerging era of agentic artificial intelligence, where autonomous AI agents continuously process and execute increasingly complex workloads.
The Arm AGI CPU is positioned as a highly efficient alternative to conventional x86 processors. According to the company, the processor delivers superior rack-level performance while improving overall infrastructure efficiency. The architecture is also designed to reduce capital expenditures for customers while enabling more efficient scaling of AI workloads across cloud and enterprise environments.
This initiative represents a strategic evolution beyond ARM's traditional licensing model. Rather than serving solely as a processor architecture provider, the company is increasingly positioning itself as a core infrastructure platform supporting the next generation of AI-powered data centers.
Cloud Leaders Continue Expanding ARM AdoptionMomentum behind Arm Holdings' architecture continues to accelerate among leading hyperscale cloud providers and AI infrastructure companies. NVIDIA (NVDA - Free Report) has further expanded its collaboration with ARM by integrating Arm-based CPUs into next-generation AI systems while introducing its Vera CPU platform to improve utilization and performance across AI clusters. NVIDIA continues to demonstrate growing confidence in ARM's processor architecture as AI infrastructure becomes increasingly complex.
Meanwhile, Alphabet (GOOGL - Free Report) is significantly deepening its own Arm strategy. Through Google, Alphabet plans to integrate custom Axion CPUs into future Tensor Processing Unit systems, replacing legacy x86 host processors with Arm-based designs to improve efficiency and AI training economics. The continued commitment from Alphabet further validates Arm's expanding importance within hyperscale cloud infrastructure.
Beyond NVIDIA and Alphabet, major technology companies, including AWS, Microsoft, Oracle, Samsung, Micron and SK Hynix, continue broadening support for the wider Arm ecosystem, reinforcing its position as an industry standard.
Strong Customer Demand Supports Long-Term GrowthCustomer demand for the Arm AGI CPU has already exceeded the company's initial launch expectations. Interest has been particularly strong among cloud service providers, telecommunications companies, and enterprise AI customers seeking more efficient computing architectures for increasingly demanding workloads.
Arm Holdings also noted that Arm-based processors now account for approximately half of CPU deployments across major hyperscale cloud providers, highlighting the company's growing influence within modern cloud infrastructure. As enterprises continue accelerating investments in artificial intelligence, Arm appears well-positioned to capture a larger share of future infrastructure spending.
The company's expanding ecosystem, dominant mobile presence, and increasing adoption across AI infrastructure collectively strengthen its long-term outlook. Backed by growing commitments from industry leaders such as NVIDIA and Alphabet, Arm Holdings is steadily evolving from a mobile processor leader into one of the foundational technology providers powering the next generation of global AI computing infrastructure.
We are expecting 21% sales growth and 19% increase in EPS for ARM in the current fiscal year, suggesting a steadier growth trajectory as it continues to scale its licensing model and invest in AI-enabled chip innovation.
ARM’s Premium Valuation Could Limit Near-Term UpsideDespite the company’s impressive execution, valuation remains one of the biggest concerns surrounding the stock.
ARM currently trades at a forward price-to-sales ratio of 55.09X, far above the semiconductor industry average of approximately 9.51X. The stock also carries a Value Score of F, highlighting its premium valuation relative to peers.
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Such elevated pricing suggests investors are already anticipating substantial long-term growth fueled by artificial intelligence adoption, expanding royalty streams and broader deployment of ARM architecture in advanced computing systems.
However, the semiconductor industry remains highly cyclical. If smartphone demand rebounds more slowly than anticipated or hyperscaler spending begins to moderate, market sentiment could deteriorate quickly. In these situations, expensive semiconductor stocks often experience amplified downside volatility.
As a result, even continued operational strength may not fully protect ARM shares if broader macroeconomic or industry conditions weaken. The current valuation leaves limited room for execution missteps or slower-than-expected growth.
ARM Stock Appears Worth HoldingArm Holdings continues to strengthen its long-term investment case through its dominant processor ecosystem, expanding role in artificial intelligence infrastructure, and growing adoption among leading cloud providers. Its architecture remains deeply embedded across mobile computing while new AI initiatives create meaningful opportunities beyond its traditional licensing business. However, much of this optimism already appears reflected in the stock's premium valuation, leaving limited room for disappointment if industry demand softens or growth moderates. Given its outstanding fundamentals but elevated valuation, ARM appears best suited as a Hold, with investors waiting for a more attractive entry point before adding to positions.
ARM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arm uvedl AGI CPU pro AI datová centra a říká, že poptávka už od spuštění překonala očekávání. Procesory Arm teď tvoří zhruba polovinu nasazení CPU u velkých hyperscalerů.
Key Takeaways ARM introduced the AGI CPU to improve efficiency and performance for AI data center workloads.Arm said demand has exceeded launch expectations from cloud, telecom, and enterprise AI customers.ARM noted that Arm-based processors now account for about half of CPU deployments at major hyperscalers. Arm Holdings (ARM - Free Report) is stepping up its ambitions in AI infrastructure with the Arm AGI CPU, a processor purpose-built for the emerging era of agentic AI workloads. The company believes the shift from traditional AI queries to continuously operating AI agents will significantly increase computing demand inside data centers, creating a substantial long-term growth opportunity.
The Arm AGI CPU is designed as a high-efficiency alternative to conventional x86 processors. The company says the new chip delivers meaningfully higher rack-level performance while improving overall infrastructure economics. It also believes its architecture can help customers reduce capital expenditures while scaling AI workloads more efficiently across cloud and enterprise environments.
The launch reflects Arm Holdings' broader strategy to extend beyond its traditional licensing business and strengthen its position within the AI hardware ecosystem. The company is increasingly positioning its architecture not only as a foundational technology layer but also as a scalable platform powering the next generation of AI infrastructure.
Cloud Giants Deepen Arm AdoptionMomentum behind the ARM platform continues to build among hyperscalers and AI infrastructure providers. NVIDIA (NVDA - Free Report) highlighted deeper integration of Arm-based CPUs across its next-generation AI systems and introduced its Vera CPU platform to enhance utilization and performance in AI environments. NVIDIA's expanding collaboration with Arm reinforces the growing importance of Arm-based computing within large-scale AI clusters.
Alphabet's (GOOGL - Free Report) Google is also advancing its Arm strategy by integrating custom Axion CPUs into future TPU systems. The company stated that its next-generation TPU infrastructure will replace legacy x86 host processors with Arm-based designs to improve efficiency and training economics. Google's continued commitment further reinforces confidence in Arm Holdings' expanding role within the future of cloud AI infrastructure.
Demand Pipeline Continues to StrengthenArm Holdings stated that customer demand for the AGI CPU has already exceeded its initial launch expectations, driven by interest from cloud service providers, telecom infrastructure companies, and enterprise AI customers. The company also noted that Arm-based processors now account for approximately half of CPU deployments among major hyperscale cloud providers.
Beyond Google and NVIDIA, industry leaders including AWS, Microsoft, Oracle, Samsung, Micron and SK Hynix continue expanding support for the broader Arm ecosystem. As global investment in AI infrastructure accelerates, Arm Holdings is positioning itself as a core architecture provider for the next generation of intelligent data centers.
ARM’s Price Performance, Valuation, EstimatesThe stock has gained 107% over the past year compared with the industry’s 80% growth.
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From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 54.78X, well above the industry’s 9.61X. It carries a Value Score of F.
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The Zacks Consensus Estimate for the company’s fiscal 2027 earnings has remained unchanged over the past 30 days.
Image Source: Zacks Investment Research
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arm Holdings continued to decline on Wednesday, extending losses after the semiconductor stock tumbled more than 10% in the previous session as investors rotated out of several high-flying artificial intelligence names.
Arm shares fell 4.7% to $349.03 and are down about 19% since the beginning of the week.
Despite the recent selloff, the stock remains one of the strongest performers in the semiconductor sector, having surged 227% this year and gained 127% over the past 12 months, according to Dow Jones Market Data.
The weakness in the stock comes amid a broader reassessment of valuations across AI-related companies.
However, Wall Street analysts remain optimistic about Arm's long-term prospects and continue to raise their price targets on the chip designer.
Both UBS and TD Cowen increased their targets on the stock on Wednesday, arguing that Arm remains well positioned to benefit from the next phase of AI infrastructure spending.
UBS raised its price target on Arm to $470 from $260 while maintaining a Buy rating on the stock.
The new target implies about 33% upside from Wednesday's trading levels.
UBS analyst Timothy Arcuri said investor attention is increasingly centered on the revenue potential of Arm's internally developed central processing units.
“The real investor debate, in our view, is revenue potential for Arm’s standalone CPU,” Arcuri wrote Wednesday.
The analyst team expects revenue from Arm's internal CPUs to grow to around $14 billion by 2030.
According to the company, its internal chip business is not expected to become financially material until fiscal 2028.
“Arm’s core competency lies in latency and efficiency—which aligns well with hyperscaler needs,” Arcuri wrote.
TD Cowen also raised its price target to $475 from $265 and reiterated its Buy rating, implying roughly 35% upside from current levels.
The brokerage said the changing AI workloads are increasing the importance of central processing units.
“The Doing Behind The Thinking: As agentic AI shifts more work from the thinking GPUs do to the doing CPUs handle, CPUs are becoming an AI beneficiary,” the analyst stated.
TD Cowen added that Arm's target of generating $15 billion in annualized AGI CPU revenue by fiscal 2031 appears reasonable, identifying GPU-to-CPU attachment rates and pricing per core as key factors influencing that outlook.
Arm has traditionally generated revenue by licensing its instruction-set architecture and collecting royalties from customers, including Apple, Nvidia, Samsung, and Qualcomm.
At its core, Arm develops the fundamental interface between CPU chips and software and serves as the principal alternative to the x86 architecture used by Intel and Advanced Micro Devices.
However, the company is increasingly moving beyond intellectual property licensing and into full-scale chip production, creating a new investment debate around the size of its future semiconductor business.
TD Cowen suggested the market may be applying a 15% share estimate too mechanically to Nvidia's estimated $200 billion CPU total addressable market, while maintaining a more constructive view on Arm's intellectual property opportunities.
Bank of America also raised its target on Arm earlier this week to $460 from $335 and reiterated its Neutral rating.
“We see Arm as one of the most prominent beneficiaries of the rising server CPU tide,” Bank of America analyst Vivek Arya wrote.
Masayoshi Son věří, že Arm Holdings může zhruba z 390 miliard USD vyrůst na 4 biliony USD díky AI a energeticky úsporným CPU. Firma se posouvá od licencování architektur k dodávce hotových procesorů.
Artificial intelligence is reshaping the semiconductor industry in ways few investors anticipated just a few years ago. The early winners were obvious: Nvidia (NASDAQ:NVDA | NVDA Price Prediction) dominated AI accelerators, while memory makers like Micron Technology (NASDAQ:MU) are benefiting from soaring demand for high-bandwidth memory.
Now the battle is shifting toward a less glamorous but equally important component of AI infrastructure — the CPU. That shift helps explain why SoftBank CEO Masayoshi Son believes Arm Holdings (NASDAQ:ARM) could increase its value tenfold from its current market capitalization of roughly $390 billion. It is an ambitious prediction, but unlike many bold technology forecasts, there is a tangible roadmap behind it.
Arm Is Expanding Beyond Its Traditional Business For decades, Arm operated one of the most profitable business models in technology. The company designed processor architectures and licensed them to companies such as Apple (NASDAQ:AAPL), Qualcomm (NASDAQ:QCOM), and Samsung. Last year, royalty and licensing revenue generated over $4 billion without Arm needing to manufacture a single chip. That model may be changing.
Arm is moving into supplying complete processors rather than simply licensing intellectual property. Instead of collecting a royalty on every chip sold, Arm could capture a much larger share of the economics by selling finished products.
The strategy mirrors what Nvidia accomplished when it evolved from a graphics chip designer into a full-stack AI infrastructure provider. For Arm, the opportunity is even larger because CPUs remain the central nervous system of every computing platform.
SoftBank has also invested heavily in Intel‘s (NASDAQ:INTC) foundry business, creating a potential manufacturing partner outside of Taiwan Semiconductor Manufacturing (NASDAQ:TSM). While Arm has no plans to build fabrication plants itself, access to multiple manufacturing partners could support a direct-chip strategy.
AI Is Turning CPUs Into Critical Infrastructure Again Son’s thesis depends on one major assumption: AI becomes increasingly CPU-intensive. That sounds counterintuitive because Nvidia’s GPUs currently dominate AI training. Yet GPUs cannot operate independently. CPUs manage memory, route data, coordinate workloads, and keep AI systems running efficiently.
As AI increasingly shifts toward inference — the process of running trained models in real-world applications — CPU performance and power efficiency become increasingly important. This trend is already visible across the industry:
Company ARM-Based CPU Platform Amazon (NASDAQ:AMZN) AWS Graviton Microsoft (NASDAQ:MSFT) Azure Cobalt Google Cloud Axion Nvidia Grace According to Amazon, Graviton-powered instances now account for more than half of newly added server capacity. Meanwhile, Nvidia pairs its Grace CPU with Blackwell AI systems, making ARM architecture a core component of its AI infrastructure strategy.
The result is mounting pressure on Advanced Micro Devices‘ (NASDAQ:AMD) EPYC processors and Intel’s Xeon lineup. UBS estimates ARM-based chips could capture 40% to 45% of server CPU shipments by 2030.
Can Arm Really Challenge AMD and Intel? The answer increasingly appears to be yes. For decades, AMD and Intel benefited from the dominance of x86 architecture. However, AI data centers face a new constraint: power consumption.
ARM’s architecture was originally designed for smartphones, where energy efficiency is paramount. As a result, ARM-based processors often deliver higher performance per watt than competing x86 chips. That is important when hyperscalers are spending tens of billions of dollars annually on power, cooling, and data center expansion.
The advantage is not merely theoretical. Amazon, Microsoft, Google, and Nvidia are all deploying custom ARM silicon instead of relying exclusively on AMD or Intel. In effect, the largest cloud companies are creating their own alternatives to the traditional CPU vendors.
At the same time, ARM benefits regardless of which customer wins because it sits in the middle collecting licensing fees — and potentially much larger hardware profits if its direct-chip strategy succeeds.
Key Takeaway In short, Masayoshi Son’s prediction is aggressive, but it is not built on fantasy. Arm is benefiting from two powerful trends simultaneously: the rise of custom AI silicon and growing demand for energy-efficient CPUs.
Granted, a jump from roughly $390 billion to $4 trillion would require flawless execution, broader adoption of ARM servers, and success in selling its own processors. That is a tall order. Yet the company is no longer competing solely in smartphone chips. It is positioning itself at the center of AI infrastructure, cloud computing, and next-generation PCs.
For investors, the key question is not whether Arm will 10X tomorrow. It is whether ARM architecture becomes the foundation of the AI era. If that happens, Son’s forecast may look less outrageous than it does today.
Duquesne Family Office Stanleyho Druckenmillera nově přidala Arm Holdings a drží Sea Limited i STMicroelectronics. Všechny tři sázejí na AI výpočetní kapacitu napříč datovými centry a digitálními službami.
Stanley Druckenmiller’s Duquesne Family Office disclosed positions in Arm Holdings (NASDAQ: ARM | ARM Price Prediction), Sea Limited (NYSE: SE), and STMicroelectronics (NYSE: STM) in its Q1 2026 13F, filed May 15, 2026. According to the filing, Arm was an addition during the quarter at roughly a 0.5% portfolio weight, while Sea and STMicro were larger existing positions at approximately 2.7% each. Because 13Fs are point-in-time snapshots reported about 45 days after quarter end, these reflect holdings only as of March 31 and may have changed since.
The connecting thesis across all three is AI compute at different points on the value chain: Arm’s CPU intellectual property for hyperscaler data centers, STMicro’s specialty silicon and AWS data center partnership, and Sea’s AI-enabled commerce, fintech, and gaming ecosystem in Southeast Asia and Latin America.
Arm Holdings: An Add, but the Math Is Stretched Bull case: Arm posted Q4 FY2026 revenue of $1.49 billion, up 20.1% year over year, with non-GAAP EPS of $0.60 and data center royalty revenue more than doubling. CEO René Haas framed “Arm AGI CPU” demand as exceeding expectations, with more than $2 billion in customer commitments across FY27 and FY28. Analyst sentiment is overwhelmingly bullish.
Bear case: The stock is up 267.8% year to date to $407.72. The Wall Street consensus target is $281.58, roughly 30.9% below the current price, while our model’s base case target is $412.58, implying just 1.2% upside. With a P/E near 474 and a beta of 3.79, the margin of safety is thin.
Sea Limited: Held, Not Added, but the Setup Improved Bull case: Sea delivered Q1 2026 revenue of $7.10 billion, up 46.6% year over year, with Shopee GMV of $37.3 billion (up 30.2%) and Monee loans outstanding of $9.9 billion, up 71.3%. Analysts skew strongly positive, with a target price of $140.50, against a current price of $89.04. The forward P/E of 31 looks reasonable for this growth rate.
Bear case: Shares are down 30.6% year to date and 42.0% over one year, and Q1 EPS of $0.67 missed the $0.77 estimate by 13.0% as reinvestment compressed margins.
STMicroelectronics: Held, and the Story Has Re-Rated Bull case: The multi-year, multi-billion-dollar AWS engagement reframes STMicro as an AI infrastructure name, and CEO Jean-Marc Chery has guided data center revenue to above $500 million in 2026 and well above $1 billion in 2027. Shares are up 206.6% year to date to $79.91.
Bear case: The consensus analyst target of $64.36 sits below the current price, the trailing P/E is 490, and quarterly earnings growth was negative 33.3% year over year.
The Verdict for Retirement-Focused Investors Druckenmiller’s disclosed Q1 positioning is best read as a research signal for further diligence. Sea offers the cleanest risk/reward: a reasonable forward multiple, unanimous analyst support, and price well below its 52-week high. STMicro’s AWS story is compelling, but the recent rally has already priced in much of the optionality. Arm is the hardest to follow at current levels, where even bullish analysts model meaningful downside. These are research starting points worth deeper due diligence, not templates for portfolio action.
