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.
The boss of one of the UK’s biggest chip companies has claimed AI will be able to find a cure for cancer “in our lifetime”.
Rene Haas, chief executive of the chip designer Arm Holdings, said that, while modelling how a DNA marker is affected by cancer was currently “too complex” a problem for either humans or technology, computers were “going to solve it” in the future.
Haas told the BBC: “AI is going to … find a cure for cancer that today you and I, other humans [could] not in our lifetimes. I believe in our lifetime, AI will help cure cancer.
“Modelling how a DNA marker is impacted by cancer – it’s too complex a problem, not only for humans today, but the computers that run AI.
“However, going forward, as we feed more and more of the models into these computers, and the computers get more sophisticated to run the models, they’re going to solve it.”
Scientists are already using AI-driven tools in cancer research and testing. Earlier this year, the NHS said more than 4 million patients received faster lung diagnosis thanks to funding in AI-powered X-ray tools.
Haas added that AI would also pave the way for widespread humanoid robots within the next five years, but that chip shortages were stunting growth in the area.
“With artificial intelligence, these robots can see, learn, and essentially be reprogrammed for new tasks,” he said. “So, in the service industry, the robot that was programmed to make a bed can also learn how to arrange the towels in a room, or clean the dustbins, or whatever you want to go off and do.”
Arm, which is listed in New York but retains its global headquarters in Cambridge, has about 500 users of its chip designs worldwide, including Apple, Samsung, Qualcomm and Nvidia. The company employs more than 7,000 staff, including about 3,000 in the UK. It is the biggest tech company headquartered in Britain – valued at $269bn (£199bn).
Haas, who joined Arm in 2013 and became chief executive in 2022, was also recently named chief executive of SoftBank’s international business. The Japanese bank is one of the biggest tech investors in the world, with a stake in ChatGPT maker OpenAI.
Earlier this year, Arm also proposed a pay scheme for Haas that could make him a billionaire if he hits targets to turn the chip designer into a trillion-dollar company.
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.
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.
Shares of Arm Holdings (ARM -2.91%) slipped on Tuesday, falling as much as 5.1%. As of 12:46 p.m. ET, the stock was still down 3.3%.
The catalyst that drove the semiconductor specialist lower was concern about an insider stock sale -- but the devil's in the details.
Image source: The Motley Fool.
A significant sale, or was it? A regulatory filing that dropped on Monday revealed that CFO Jason Child sold 10,400 shares of Arm stock at $255.33 per share, with the total sale netting the executive more than $2.65 million.
The sale of company stock by an insider or executive always tends to draw investor scrutiny, but it's important to step back and look at these sales in context. The sale was part of a previously disclosed Rule 10b5-1 trading plan, adopted earlier this year. Such plans allow executives and company insiders to dispose of shares at predetermined intervals without running afoul of insider trading rules.
To be clear, that sale represented only a small part of the CFO's total stake in Arm. Even after the share sale, Child still owns 163,832 shares, worth more than $39.6 million at Monday's closing price.
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Like many executives, Arm's CFO receives the vast majority of his compensation in the form of stock options and awards, so it's necessary for him to sell shares from time to time. In cases like this, there's no hidden motive or anything nefarious about the share sale, just an executive needing access to his funds.
It's worth noting that Arm Holdings stock is richly valued at 239 times earnings and 105 times forward earnings. A valuation of that magnitude tends to fuel volatility, which was apparent in today's stock price move.
Danny Vena, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Arm Holdings. The Motley Fool has a disclosure policy.
Arm has quietly captured the CPU backbone of the AI data center buildout, yet its current price tells a strikingly different story than its growth numbers do. Here is what Wall Street keeps missing.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) has quietly become the CPU backbone of the AI data center buildout, and the market isn’t fully pricing it in. Between hyperscaler design wins, a rapidly ramping first-party silicon business, and a data center royalty line that more than doubled year over year again, the setup is stronger than the price action suggests.
Our 24/7 Wall St. price target for Arm is $265.32, implying 10.99% upside from $239.05. The recommendation is buy, with confidence at 90%.
24/7 Wall St. Price Target Summary Metric Value Current Price $239.05 24/7 Wall St. Price Target $265.32 Upside 10.99% Recommendation BUY Confidence Level 90% A Wild Ride Into the AGI CPU Launch Arm has been one of the most volatile mega-caps of 2026. Shares are up 118.69% year to date and 67.7% over the past year, but down 1.75% over the past week after a 6.33% drop on August 28. Shares sit roughly halfway between the 52-week low of $100.02 and high of $452.70.
Q1 FY2027 revenue landed at $1.289 billion, up 22.41% YoY and beat consensus, though GAAP EPS of $0.25 missed the $0.4038 estimate as opex climbed 28% to $1.16 billion. Non-GAAP EPS came in at 45 cents, up 29%, above guidance, with data center royalty revenue more than doubling.
Why Bulls See a Breakout to $422 The bull case is straightforward: the Arm AGI CPU is now a real revenue line. Management said demand exceeds $2 billion versus the $1 billion opportunity outlined last quarter across fiscal 2027 and 2028, with Meta, OpenAI, Cerebras, Cloudflare, and Oracle named as customers.
CEO Rene Haas told investors, “Our confidence in achieving upside to our $1 billion opportunity for the ArmAGI CPU business has increased in the past 90 days.”
Arm holds roughly 50% CPU compute share among top hyperscalers, and management flagged peer TAM estimates as high as $200 billion, suggesting its own $100 billion by 2030 data center CPU forecast may be conservative. Our bull case takes shares to $422.36, a 76.68% gain, matching the Street high near the $452.70 52-week high.
What Could Go Wrong Valuation is the key risk. Arm trades at a trailing P/E of 246 and forward P/E of 115, versus a beta of 3.9. Q1 operating margin compressed to 7% from 11%, though net income was flattered by $128 million in unrealized equity gains.
Bulls note opex pressure reflects heavy R&D ($838 million) tied to the AGI CPU ramp, and non-GAAP operating margin actually expanded 200 basis points year over year to about 41%. The Qualcomm litigation goes to trial in Q4 2026, and China exposure ($200 million in Q1) sits inside tightening export controls. Our bear case targets $212.73.
How Arm Compares to NVIDIA and Qualcomm NVIDIA (NASDAQ:NVDA) selected Arm’s architecture for its Vera CPU in next-gen AI systems. NVIDIA trades at a forward P/E of 26 against 105.9% YoY revenue growth, dramatically cheaper than Arm’s 115x forward multiple. That gap underpins the bear valuation argument, though Arm’s IP-royalty model deserves a premium.
Qualcomm (NASDAQ:QCOM) is both litigation counterparty and emerging data center CPU rival via its Arm-based Dragonwing C1000. Qualcomm trades at a forward P/E of 16 with revenue declining 4% YoY, showing what a mature semi multiple looks like. The gap validates Arm’s premium as long as royalty growth stays above 20%. Our $265.32 target sits well below the analyst consensus of $286.44.
Company Forward P/E Analyst Target Arm 115 $286.44 NVIDIA 26 $305.79 Qualcomm 16 $193.10 Verdict: Buy Rating With Weakness as an Entry Setup My verdict is a buy with 90% confidence and a 24/7 Wall St. price target of $265.32. AGI CPU demand has doubled to over $2 billion in 90 days, and Arm has secured the wafer, substrate, and test capacity to fulfill it.
Investors with tolerance for the elevated beta may find the risk/reward more attractive on any pullback toward the 200-day moving average near $198.91. Caution is warranted if the Qualcomm trial produces adverse rulings or if smartphone royalty growth slips below the high teens.
Here is where our model projects Arm could trade, assuming current AGI CPU adoption trends and 20%-plus royalty growth hold.
Year 24/7 Wall St. Price Target 2026 $250.97 2027 $265.32 2028 $298.29 2029 $308.18 2030 $342.85 These projections assume Arm executes on the AGI CPU roadmap and defends hyperscaler share. Significant upside or downside could result from the Qualcomm trial outcome or a step-change in AI infrastructure spending.
Contact [email protected] for any questions or corrections.
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.
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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.
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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.
Key Takeaways Arm Holdings benefits as AI adoption broadens demand for energy-efficient processor architecture.Its royalty model can expand revenues without the capital-intensive manufacturing costs of chipmakers.ARM has surged 126% year to date, while fiscal 2027 earnings estimates increased over the past 30 days. Although enthusiasm surrounding artificial intelligence has lifted valuations across the semiconductor sector, Arm Holdings’ (ARM - Free Report) long-term potential extends beyond short-lived market excitement. Its growth opportunity is rooted in the widening adoption of Arm architecture across multiple computing markets as AI workloads become more diverse and demanding.
Unlike companies focused primarily on AI accelerators or networking products, Arm supplies the processor architecture that supports efficient computing across a broad spectrum of applications. As enterprises and cloud providers increasingly prioritize energy efficiency, demand for Arm-based processors could accelerate, particularly in markets where performance per watt is critical.
Arm Holdings’ royalty-based business model provides another important advantage. As customers incorporate its designs into smartphones, data-center processors, automotive systems and edge devices, the company can generate expanding royalty revenues without bearing the capital-intensive manufacturing costs faced by traditional chipmakers. This asset-light structure positions ARM to benefit meaningfully as adoption grows.
The company’s AI opportunity is also not confined to a single end market. The proliferation of custom silicon, AI-enabled devices and specialized computing workloads offers additional avenues for Arm architecture to expand its reach. As more industries embed AI into their products and operations, demand for efficient, scalable computing solutions could further strengthen Arm’s market position.
Investor expectations remain elevated, creating execution and valuation risks. Nevertheless, ARM’s AI prospects are supported by structural industry trends rather than market hype alone. Its expansive ecosystem, scalable licensing model and growing presence across next-generation computing markets provide a solid foundation for sustained long-term 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 126% year to date, significantly outperforming the industry’s 28% rally.
Image Source: Zacks Investment Research
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 39.1X, well above the industry’s 5.07X. 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 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.
Advanced Micro Devices currently demonstrates a stronger overall baseline for revenue generation, maintaining a wider financial scale than Arm across all the observed quarterly reporting periods. Over the course of the last eight quarters, AMD has maintained a consistently upward year-over-year revenue trajectory, while Arm has navigated a more volatile quarter-over-quarter pattern.
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 (ARM +4.20%) stock jumped 4% through 12:45 p.m. ET Thursday. You can thank the friendly bankers at Bank of America for that.
In a note out this morning discussing the semiconductor market, BofA analyst Vivek Arya revised his forecast for growth in CPU sales. He named several stocks that may benefit from his projections -- but perhaps none more than Arm.
Image source: Getty Images.
Bank of America CPU forecast Arya had previously forecast 2030 CPU sales of $170 billion, but he now thinks this estimate too conservative. Seeing how artificial intelligence is evolving and increasingly leaning toward agentic AI, Arya now thinks the CPU market could hit $210 billion in sales by 2030.
That's nearly five times the size of the CPU market in 2025, and implies annualized sales growth of 36% for the semiconductor industry over the next 4-5 years. And here's the thing: As StreetInsider.com reports today, Arya thinks Arm will gain market share faster than any other company over this period -- which means Arm sales should grow faster than 36% annually over the next 4-5 years!
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What it means for Arm stock Arm designs energy-efficient CPU architectures for other companies to manufacture, generating ultra-high-margin licensing and royalty revenue from its services. Analysts, on average, were already projecting nearly 35% annual earnings growth for Arm over the next five years, but if Arya is right in his projections, that's just the baseline.
Ultra-high profit margins (of as much as 97.5% last year, according to data from S&P Global Market Intelligence), plus 36% overall growth in CPU shales, should mean even faster profit growth for Arm. Granted, at a price-to-earnings ratio of 278, Arm seems a very expensive stock today.
If BofA's got its math right, though, Arm stock might actually be worth it.
Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Arm Holdings. The Motley Fool has a disclosure policy.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) just delivered its third consecutive year of more than 20% revenue growth, with CEO Rene Haas emphasizing Arm as the compute platform for the AI era.
Shares are up 146.03% year to date, then slipped hard. Can Arm reach $450 over the next 12 months from today’s $268.93? Here’s what the numbers show.
What’s Holding Arm Back Right Now Shares are down 4.15% in the past week and 16.84% over the past month, reversing mid-year gains near $396.34.
Two forces pressure the stock. Q1 FY27 EPS came in at $0.25 versus the $0.40 estimate, a 38.09% miss, even as revenue beat by 1.7%. Operating margin compressed to 7% from 11% YoY, with share-based compensation at $343 million.
Second, $50.6 million in insider sales over the last 3 months and cooling AI investment sentiment weigh on the tape. With a beta of 3.909, every macro wobble amplifies.
Wall Street Sees Modest Upside. Our Model Agrees, But Both May Be Too Cautious Consensus target sits at $287.79. The rating board shows 7 Strong Buy, 20 Buy, 11 Hold, 1 Sell, and 1 Strong Sell, with 68% bullish sentiment.
Our base case comes in at $278.04, or 3.39% upside, with a hold signal and 90% confidence. The bull scenario reaches $426.49, and the bear case falls to $221.63. Earnings growth contributed +0.03 to the 247Factor and analyst consensus contributed +0.038. If the AGI CPU ramp materially exceeds forecasts, the base case is too low.
The Path to $450 Per Share Reaching $450 from today’s $268.93 requires a 67.3% gain. With forward EPS of $1.92, a price of $450 implies a forward P/E of 234x. Our base case of $278.04 already implies 210x, meaning the bold target requires 24x of additional multiple expansion.
That is a stretch, but catalysts exist. The Arm AGI CPU has more than $2 billion in contracted customer demand across FY27-FY28, with Meta, SAP, Cloudflare, OpenAI, Cerebras, NVIDIA, Microsoft, and Google integrating the platform.
Data center royalty revenue more than doubled YoY in Q4 FY26, and Arm’s compute share at top hyperscalers is expected to reach nearly 50% this year, up from sub 20% the prior year.
Jefferies raised its price target to $320 and projects AI CPU revenue reaching $18 billion by fiscal 2031. Haas said demand for the AGI CPU has “exceeded expectations, reinforcing Arm as the compute platform for the AI era.” If non-GAAP operating margin recovers toward 40%+ and Armv9 royalty rates climb, earnings shift fast.
Primary risk: an adverse ruling in the Qualcomm litigation trial expected in Q4 2026.
Where Arm Trades Today vs Its Earnings Power Current forward P/E works out to roughly 140x. That is expensive by conventional standards, and GuruFocus flags a 24% to 43% overvaluation gap versus its GF Value estimate.
Shares trade 36% below the 52-week high of $452.70 and well above the low of $100.02. The five-year return is 322.91%, though that history is short given the 2023 IPO. Valuation only works if EPS growth compresses that multiple fast. That is the bull thesis.
Is $450 Realistic? Reaching $450 requires a 67.3% gain in 12 months and a forward P/E of 234x. That is a stretch.
Three things must go right: AGI CPU deliveries convert the $2 billion contracted pipeline into recognized royalty at rising rates; non-GAAP operating margin snaps back toward 40%+; hyperscaler CapEx keeps expanding. Risks include a bad outcome in the Qualcomm trial or a broader semiconductor multiple reset. We’ve outlined the blueprint for how Arm could reach $450 in 2027.
Contact [email protected] for any questions or corrections.
Arista Networks: A Pattern of Consistent Sequential Revenue IncreasesArista Networks (ANET -1.90%) primarily generates revenue by designing, promoting, and distributing advanced cloud networking hardware and software applications to large-scale enterprise customers and major internet service providers across global markets.
While introducing the new 7060XE7 Series networking hardware portfolio during June 2026, it generated a 40% net income margin and $1.1 billion in free cash flow for the quarter ended June 30, 2026.
Arm: Fluctuating Quarter-Over-Quarter Revenue TrendsArm Holdings (ARM -1.43%) primarily generates revenue by conceptualizing, engineering, and licensing foundational central processing unit designs and related systems intellectual property to global technology manufacturers and original equipment manufacturers.
It became the subject of multiple federal securities fraud investigations during May 2026. It reported a 21% net income margin alongside $694.0 million in free cash flow for the quarter ended June 30, 2026.
Why Revenue Performance Matters for Investors Evaluating These StocksRevenue functions as a fundamental baseline indicator of whether a commercial business is successfully attracting active customers and expanding its total financial sales footprint over time.
Examining Quarterly Revenue for Arista Networks and ArmQuarter (Period End)Arista Networks RevenueARM RevenueQ3 2024 (Sept. 2024)$1.8 billion$844.0 millionQ4 2024 (Dec. 2024)$1.9 billion$983.0 millionQ1 2025 (March 2025)$2.0 billion$1.2 billionQ2 2025 (June 2025)$2.2 billion$1.1 billionQ3 2025 (Sept. 2025)$2.3 billion$1.1 billionQ4 2025 (Dec. 2025)$2.5 billion$1.2 billionQ1 2026 (March 2026)$2.7 billion$1.5 billionQ2 2026 (June 2026)$3.0 billion$1.3 billionData source: Company filings. Data as of Aug. 7, 2026.
Foolish TakeA look at the revenue trends of Arista Networks and Arm Holdings provides investors with key insights. The former’s consistent quarter-over-quarter sales growth indicates the strong demand it’s seeing for its offerings, thanks to the rapid expansion of the artificial intelligence sector.
Arm is experiencing a more typical year-over-year growth trajectory as its tech focus has been historically around mobile devices. The company has now expanded into solutions for AI-centric data centers. Its data center royalties more than doubled year over year in the second quarter, indicating rising demand for its solutions in this market. Now that Arm is pivoting more towards AI, its sales growth should start to look different from the trend seen over recent quarters.
Even so, Arm stock has fallen since shares hit a 52-week high of $452.70 in June as investors took profits. Despite the price drop, Arm’s valuation remains elevated at a forward price-to-earnings ratio of 128.
Arista Networks had a spectacular second quarter as revenue hit $3 billion for the first time. That contributed to shares reaching a 52-week high of $214.89 in August.
Robert Izquierdo has positions in Arista Networks and Arm Holdings. The Motley Fool has positions in and recommends Arista Networks and Arm Holdings. The Motley Fool has a disclosure policy.
Arm Holdings is rated a Strong Buy, positioned to capitalize on the surging AI and AGI CPU market. ARM's AGI CPU demand has doubled QoQ, with secured capacity for over $2 billion in orders and major partners like Meta and Oracle. Management targets $25 billion in revenue by FY31, but I expect ARM could capture 15-20% AGI CPU share, implying $33–44 billion in revenue potential.
Arm Holdings (ARM) is rated a buy, driven by robust revenue growth, AI momentum, and a dominant semiconductor IP ecosystem. Q1 2027 results showed 22% revenue growth, with royalties and licensing both expanding over 20%, and data center royalties more than doubling year over year. ARM's asset-light, high-margin model (97.5% gross margin) and expanding AI/data center presence position it for significant earnings acceleration as reinvestment moderates.
Arm Holdings delivered a 151% YTD return, peaking above 300% in June on AI-driven optimism. ARM's rally reversed in July following a series of negative news events impacting sentiment. AI enthusiasm was the primary driver of ARM's earlier surge, but recent developments have tempered expectations.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) sits at the center of the AI compute story. Its architecture powers roughly 50% CPU compute share among top hyperscalers, and the new Arm AGI CPU has already booked more than $2 billion in customer demand across fiscal 2027 and 2028.
Shares are up 118.7% year to date, but the last month has been ugly. Can ARM reach $450 in 12 months?
Why ARM Shares Are Stuck After a Vicious Pullback ARM has given back 24.18% in the past month and 10.24% in the past week, closing at $239.06.
Q1 FY2027 earnings triggered the decline. Revenue of $1.289 billion beat estimates by 1.70%, but GAAP EPS of $0.25 missed expectations of $0.40, a 38.09% shortfall. Operating margin compressed to 7% from 11% as R&D ballooned to $838 million and share-based comp hit $343 million. With a beta of 3.77, the sharp sentiment-driven flush follows.
Wall Street Sees 20% Upside. I Think They Are Still Too Cautious The Street consensus target sits at $286.79, roughly 20% above current price. Rating split: 7 Strong Buy, 20 Buy, 11 Hold, 2 Sell, with 68% bullish sentiment.
Our internal model puts base case at $263.45 (10.2% upside) with an optimistic case of $421.75, or roughly 76.42% upside, and a confidence score of 90%. Consensus is anchored on trailing margin compression and underweights the AGI CPU ramp. With quarterly earnings growth of 108.3% and royalty revenue doubling in data center, the bullish setup deserves heavier weighting.
The Path to $450 Per Share Reaching $450 from today’s price of $239.06 requires a gain of 88.2%. With forward EPS of $1.92, a price of $450 implies a forward P/E of 234x. Our base case of $263.45 already implies 187x, meaning the target requires roughly 48x of additional multiple expansion.
That is substantial. But catalysts are stacking. NVIDIA’s Vera, Google’s Axion, and Microsoft’s Cobalt are all Arm-based, and Meta leads the AGI CPU roadmap. Data center royalty revenue more than doubled in Q4 FY2026.
CEO Rene Haas stated: “As AI becomes more agentic, demand for Arm AGI CPU, Arm’s first data center chip, has exceeded expectations, reinforcing Arm as the compute platform for the AI era.”
If FY2028 EPS scales into the $2.50 range on operating leverage, today’s 234x collapses toward 180x. Primary risk: the Qualcomm litigation trial expected in Q4 2026 could hit licensing revenue and sentiment simultaneously.
Where ARM Trades Today vs Its Earnings Power At $239.06, ARM trades at a forward P/E near 125x against $1.92 forward EPS. Valuation is elevated, but growth is real: 22.4% quarterly revenue growth and 395.51% free cash flow growth for FY2026.
Shares sit 37% below the 52-week high of $452.70, well above the low of $100.02. Since the 2023 IPO, ARM has returned 275.94%. Valuation is stretched, but the runway justifies a rerating if AGI CPU shipments land on schedule.
Can ARM Really Hit $450? My Verdict Hitting $450 in 12 months requires a gain of 88.2%. Realistic? A stretch, but plausible given the beta and ARM’s recent trading at $452.70 within the last year.
Three things must break right: AGI CPU production silicon ships and converts the $2B+ order book into recognized royalties, operating margin recovers from 7% as R&D leverages, and the Qualcomm trial resolves without a licensing overhang. What derails it? A negative Qualcomm ruling paired with China export tightening. We’ve outlined the blueprint for how Arm Holdings could reach $450 in 2027.
SummaryArm Holdings is initiated at "Hold" due to intense earnings growth but stretched valuation and heightened volatility.Recent quarterly results beat expectations, with robust royalty and licensing revenue growth, and guidance remains strong, especially in AI and data centers.Valuation concerns persist: ARM trades at a high PEG and P/S ratio, with intrinsic value estimated at $240, suggesting modest overvaluation.Technically, ARM is rangebound with $180s as key support and $300 as resistance; standing aside is prudent given volatility and cyclical risks. Jonathan Kitchen/DigitalVision via Getty Images
Was the Situational Awareness blow-up a clearing event for the chips trade? Maybe not. Shares of SK hynix (SKHY) flash crashed on the morning of Thursday, August 6. That sent bearish ripple effects across the AI trade, though losses
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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.
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.
ARM Holdings PLC Sponsored ADR (NASDAQ:ARM – Get Free Report) shares traded up 8% on Thursday after the company announced better than expected quarterly earnings. The stock traded as high as $268.48 and last traded at $242.8490. 12,695,921 shares traded hands during trading, an increase of 48% from the average daily volume of 8,606,067 shares. The stock had previously closed at $224.89.
The company reported $0.45 EPS for the quarter, topping the consensus estimate of $0.40 by $0.05. The firm had revenue of $1.29 billion during the quarter, compared to analyst estimates of $1.26 billion. ARM had a return on equity of 12.56% and a net margin of 20.25%.The business’s revenue for the quarter was up 22.4% compared to the same quarter last year. During the same period in the previous year, the company posted $0.35 EPS. ARM has set its Q2 2027 guidance at 0.430-0.510 EPS.
Key Headlines Impacting ARM Here are the key news stories impacting ARM this week:
Positive Sentiment: Arm reported fiscal Q1 2027 revenue of $1.29 billion, up 22.4% year over year and above analysts’ estimates of approximately $1.26 billion. Adjusted earnings per share of $0.45 also exceeded the $0.40 consensus. Arm shares jump after Q1 revenue, profit beat estimates Positive Sentiment: Management issued second-quarter EPS guidance of $0.43 to $0.51, above the $0.39 analyst consensus, while revenue guidance also exceeded expectations. The outlook reflects sustained demand for Arm-based processors in AI data centers and cloud computing. Arm forecasts quarterly revenue above estimates on AI-driven chip demand Positive Sentiment: Data-center royalty revenue reportedly doubled, while demand for Arm’s AI and AGI CPU roadmap strengthened. Analysts said the company remains a key beneficiary of long-term AI infrastructure spending, prompting Citi to reaffirm its Buy rating and $300 price target. Arm remains key AI infrastructure beneficiary despite softer handset outlook, Citi says Neutral Sentiment: Analyst views remain mixed. Needham reiterated Buy with a $255 target, while TD Cowen and RBC maintained positive ratings but reduced their targets to $350 and $340, respectively. Morgan Stanley raised its target to $212 but retained an Equal Weight rating, implying execution and valuation concerns. Negative Sentiment: Smartphone market weakness and memory-price pressures are expected to constrain near-term royalty growth, with second-quarter royalty growth guided at about 13%. Investors also remain cautious because ARM trades at a very high earnings multiple, leaving limited room for disappointing results. Memory Prices Hit Arm’s Royalties as Stock Falls 4% Analysts Set New Price Targets A number of equities analysts have commented on the stock. Deutsche Bank Aktiengesellschaft reiterated a “hold” rating on shares of ARM in a report on Thursday, May 7th. Royal Bank Of Canada lowered their price target on shares of ARM from $475.00 to $340.00 and set an “outperform” rating on the stock in a report on Thursday. Needham & Company LLC reaffirmed a “buy” rating and issued a $255.00 price objective on shares of ARM in a research report on Thursday. Susquehanna boosted their price objective on shares of ARM from $300.00 to $320.00 and gave the stock a “positive” rating in a research note on Tuesday, July 21st. Finally, Wells Fargo & Company reduced their price objective on shares of ARM from $350.00 to $280.00 and set an “overweight” rating for the company in a research note on Thursday. Eighteen research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, ARM presently has an average rating of “Moderate Buy” and an average target price of $286.17.
Get Our Latest Report on ARM
Insider Activity In other ARM news, insider William Abbey sold 10,887 shares of the firm’s stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $224.14, for a total value of $2,440,212.18. Following the completion of the sale, the insider owned 43,353 shares of the company’s stock, valued at approximately $9,717,141.42. This trade represents a 20.07% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CAO Laura Kathleen Bartels sold 11,306 shares of the firm’s stock in a transaction dated Tuesday, June 2nd. The stock was sold at an average price of $392.70, for a total value of $4,439,866.20. Following the completion of the sale, the chief accounting officer directly owned 12,135 shares of the company’s stock, valued at approximately $4,765,414.50. This represents a 48.23% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 216,049 shares of company stock worth $52,101,605 over the last quarter.
Hedge Funds Weigh In On ARM Hedge funds have recently modified their holdings of the stock. Amundi raised its position in shares of ARM by 24.8% in the 1st quarter. Amundi now owns 11,804 shares of the company’s stock valued at $1,153,000 after purchasing an additional 2,345 shares during the last quarter. Empowered Funds LLC grew its position in ARM by 28.8% during the 1st quarter. Empowered Funds LLC now owns 4,887 shares of the company’s stock worth $522,000 after purchasing an additional 1,094 shares during the last quarter. Schnieders Capital Management LLC. increased its stake in ARM by 9.0% during the 2nd quarter. Schnieders Capital Management LLC. now owns 2,430 shares of the company’s stock valued at $393,000 after purchasing an additional 200 shares in the last quarter. Bank of Nova Scotia acquired a new position in ARM during the 2nd quarter valued at approximately $556,000. Finally, State Street Corp raised its holdings in shares of ARM by 14.7% in the second quarter. State Street Corp now owns 441,445 shares of the company’s stock worth $71,399,000 after buying an additional 56,656 shares during the last quarter. Institutional investors and hedge funds own 7.53% of the company’s stock.
ARM Price Performance The stock’s fifty day simple moving average is $329.98 and its 200-day simple moving average is $212.71. The firm has a market cap of $259.38 billion, a PE ratio of 250.36, a PEG ratio of 6.99 and a beta of 3.76.
ARM Company Profile (Get Free Report)
Arm Limited (NASDAQ: ARM) is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.
Arm’s product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.
Further Reading Five stocks we like better than ARM Microsoft Just Flipped the AI Spending Narrative Overnight Qualcomm’s Turnaround Is Working, So Why Is Wall Street Selling? Meta’s Earnings Show Why Wall Street Is Losing Patience With AI Spending Can Starbucks Keep This Turnaround Going? The Latest Results Say Yes Receive News & Ratings for ARM Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for ARM and related companies with MarketBeat.com's FREE daily email newsletter.
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Arm Holdings (ARM +7.40%) reported fiscal first-quarter earnings on Wednesday, and the results were solid.
Revenue jumped 22% to $1.29 billion, ahead of the consensus at $1.27 billion, driven by balanced growth in license and royalty revenue. On the bottom line, adjusted earnings per share improved from $0.35 to $0.45, ahead of the consensus at $0.40.
Arm continued to see strong growth in the data center segment, where royalty revenue more than doubled year-over-year. Arm-based chips have also surpassed the x86 platform used by Intel and AMD, and Arm's lead is expected to accelerate as the data center segment grows. The company has forged close relationships with major hyperscalers such as Alphabet, Microsoft, and Amazon, as well as Nvidia, all of which license its CPU technology. Arm is known for its power-efficient CPUs, which give it an advantage in the data center, which consumes massive amounts of energy.
However, Arm's earnings announcement was relatively quiet compared to its Arm Everywhere event earlier this year, when the company unveiled the Arm AGI CPU, marking the first time it is entering production silicon. The chip will start shipping in the fourth quarter of this fiscal year, which ends next March.
The stock soared on the news, and Arm's future success will largely be determined by the performance of that chip, which has already been oversubscribed. Initial demand is more than double what the company expected.
In addition to the chip, the big news to come out of the event was its fiscal 2031 forecast of $25 billion in total revenue, $15 billion in AGI CPU revenue, and $9 in adjusted earnings per share.
Image source: Getty Images.
Forecasting revenue five years from now for a product that's not on the market yet isn't easy, and Arm has provided a conservative projection to ensure it can hit that number. In order to create that forecast, Arm estimated a CPU data center total addressable market (TAM) of at least $100 billion by that year, meaning the company expects to earn approximately 15% of the market with the AGI CPU chip. Arm's major competitors in CPUs are Intel and AMD, which also make CPUs for PCs, data centers, and a range of other products.
Since Arm gave that forecast, other estimates of the CPU market have risen. In the last week, AMD said it now sees a $220 billion market for server CPUs, reflecting the massive growth in CPU demand from Agentic AI.
Using the same market-share math above, if Arm can capture 15% of a $220 billion market, it would generate $33 billion in revenue from the AGI CPU. It's far too early for the company to make any adjustments to that forecast, as it hasn't even shipped the first chip yet, but it's worth paying attention to the TAM forecast, as the higher it goes, the more bullish it is for Arm.
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Is Arm a buy? Arm's stock is expensive by conventional metrics, but the company's unique business model makes it hard to compare directly with its semiconductor peers. Investors will have to be patient as the silicon business develops, but over the next few years, Arm has the potential to be a powerhouse in the chip sector, thanks to its battery-efficient technology. That AGI CPU could pave the way for more in-house chips.
In an interview with The Motley Fool, Arm CFO Jason Child left the door open to future chips, saying, "There's no reason we couldn't have similar silicon offerings in mobile, IoT, or in edge devices." He also named PCs, robotics, automobiles, and physical AI as potential chips.
Arm launched the AGI CPU because its customers were demanding it, and if it's successful, which the early signs indicate it will be, it seems only natural that the company would launch more chips.
It will take a while for that story to develop, but if it plays out, the stock could have huge upside potential even from its current valuation.
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 (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 (ARM), a chip-architecture company licensing processor designs to semiconductor manufacturers, rose approximately 4% in Thursday's regular-session
Key Takeaways Arm's fiscal Q1 revenue rose 22.4% to $1.3 billion, while earnings climbed 28.6% to 45 cents.Cloud demand is lifting Arm-based chips as hyperscalers adopt Neoverse designs for efficient AI workloads.ARM's AGI CPU interest is rising, but scaling production and higher R&D costs remain execution risks. Arm Holdings plc (ARM - Free Report) has entered fiscal 2027 with impressive momentum, supported by accelerating adoption of its architecture across cloud infrastructure, edge computing and emerging artificial intelligence applications. The company delivered strong fiscal first-quarter revenue as both licensing activity and royalty collections expanded at a healthy pace.
Revenues came in at $1.3 billion, beating the Zacks Consensus Estimate by 1.8% and increasing 22.4% year over year. Royalty revenues and licensing and other revenues increased 22% and 23% year over year.
Image Source: ARM
Earnings of 45 cents per share beat the Zacks consensus estimate by 12.5% and increased 28.6% year over year.
The biggest structural shift is no longer limited to smartphones. Arm's technology is increasingly becoming the preferred computing foundation for hyperscale cloud providers, AI-enabled personal computers, autonomous vehicles, robotics and industrial automation. This diversification reduces dependence on any single end market and creates multiple long-term growth engines.
Management also highlighted growing interest in its newly launched Arm AGI CPU platform. Customer demand has expanded rapidly, manufacturing capacity has been secured for the initial rollout, and discussions with additional customers continue to strengthen the commercial pipeline. While this business remains in its early stages, it represents an additional monetization avenue beyond Arm's traditional licensing model.
Image Source: ARM
Cloud AI is Becoming the Largest Growth DriverThe strongest contributor to ARM's recent performance remains cloud infrastructure.
Demand for Arm-based processors continues to rise as hyperscale cloud companies increasingly deploy custom chips designed around the company's Neoverse architecture. The trend reflects growing demand for energy-efficient processors capable of handling AI workloads without sacrificing performance.
The adoption cycle also extends beyond central processing units. Networking processors, smart network interface cards and data-processing units increasingly rely on Arm technology, creating another source of royalty growth.
Outside the cloud, the company continues to benefit from the gradual migration toward higher-value processor designs across smartphones and consumer electronics. Even when handset demand remains uneven, newer premium chip designs generate higher royalty rates, helping offset industry softness.
Another encouraging trend is the expansion of AI beyond traditional computing devices. Intelligent vehicles, robotics platforms and autonomous industrial systems increasingly require efficient processing at the edge, an area where Arm already possesses a well-established ecosystem.
Licensing Strength Reflects Deep Customer CommitmentLicensing remains equally encouraging. The company continues signing long-duration agreements with several strategic customers spanning cloud computing, automotive technology, consumer electronics and robotics. Rather than purchasing isolated processor designs, customers increasingly seek long-term access to future architecture roadmaps.
This strengthens revenue visibility while reinforcing Arm's position as a foundational technology provider instead of a cyclical semiconductor supplier.
Management also continues investing aggressively in engineering resources to support future architectures, software tools and AI-focused products. Although these investments elevate operating expenses today, they are intended to expand the company's competitive moat over the coming years.
Importantly, Arm continues generating substantial free cash flow, providing financial flexibility to support both innovation and future product expansion.
Peer Comparison: NVIDIA, QualcommAmong U.S.-listed companies, NVIDIA (NVDA - Free Report) remains one of the most relevant peers because both companies benefit directly from expanding AI infrastructure spending.
Unlike NVIDIA, which primarily generates revenue through graphics processors and complete AI computing platforms, Arm focuses on licensing processor architectures that become embedded across countless semiconductor products.
The relationship is complementary rather than purely competitive. NVIDIA continues incorporating Arm-based CPUs into several next-generation AI platforms, reinforcing confidence in Arm's growing relevance throughout modern AI infrastructure.
Another important comparison is Qualcomm (QCOM - Free Report) . Historically, Qualcomm has relied heavily on Arm architecture across its smartphone processors, but the relationship is expanding into AI-enabled PCs and future data-center opportunities. The company's continued investments in Arm-based computing illustrate the industry's growing confidence in the architecture.
While Qualcomm competes in chip design rather than processor licensing, both companies benefit from increasing adoption of AI-enabled devices that require efficient computing capabilities, making their long-term growth drivers closely aligned.
Risks Still Deserve AttentionDespite the favorable outlook, investors should remain mindful of several risks. The semiconductor industry remains cyclical, and enterprise spending can fluctuate alongside broader economic conditions. Royalty growth also depends on customer product launches and shipment volumes, introducing periodic volatility.
Another consideration is execution risk surrounding Arm's newer AI CPU initiative. Although customer interest appears strong, scaling manufacturing capacity, fulfilling orders and maintaining attractive commercial terms will be critical to realizing its full potential.
Meanwhile, increased investment in research and development will continue weighing on operating expenses. While these expenditures support future innovation, they may limit margin expansion if revenue growth slows.
Should Investors Hold ARM Stock?Arm appears well positioned to benefit from several enduring technology transitions rather than relying on a single product cycle. Its expanding presence across cloud infrastructure, intelligent edge devices, advanced automotive systems and AI software ecosystems provides multiple avenues for sustained growth. At the same time, much of this optimism is already reflected in investor expectations, leaving limited room for operational missteps. The company's long-term fundamentals remain attractive, but execution around new products, customer adoption and industry demand will remain essential. Given the balance between exceptional growth opportunities and elevated expectations, ARM currently looks best suited as a Hold for existing investors while awaiting further execution and valuation support.
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 PLC (NASDAQ:ARM) beat first-quarter revenue and profit estimates and issued upbeat second-quarter guidance, sending its shares up 6.1% in early Thursday trading.
The chip design company reported revenue of $1.29 billion for the quarter, ahead of analyst estimates of $1.26 billion. Adjusted earnings per share came in at $0.45, topping the $0.40 estimate.
License and other revenue reached $574 million, compared with estimates of $562.5 million, while royalty revenue totaled $715 million against expectations of $700.2 million.
Adjusted gross margin held at 98.1%, in line with estimates, and adjusted operating margin came in at 41.2%.
For the second quarter, Arm guided revenue of $1.33 billion to $1.43 billion, above the $1.35 billion analyst estimate. The company forecast adjusted earnings per share of $0.43 to $0.51, compared with estimates of $0.45.
Adjusted net income for the quarter totaled $480 million, ahead of estimates of $433.6 million. Adjusted gross profit was $1.26 billion, while adjusted operating income reached $531 million, topping estimates of $477.3 million. Adjusted operating expenses came in at $733 million, below the $762.5 million estimate.
Arm (ARM +5.88%) stock is rapidly gaining ground in Thursday's trading. The semiconductor company's share price was up 6.7% as of 11:15 a.m. ET. The S&P 500 was up 0.8% at the same point in the session, and the Nasdaq Composite was up 2.1%. Arm stock had been up as much as 19.4% near the session's open.
After the market closed yesterday, Arm published results for the first quarter of its 2027 fiscal year. Sales and earnings for the period topped expectations, and the company's valuation is also getting a boost from rebound trading for the broader market after yesterday's big sell-off.
Image source: Getty Images.
Arm beat Wall Street's targets in fiscal Q1 Aided by strong demand for artificial intelligence (AI) technologies, Arm posted record results in fiscal Q1 and beat the average Wall Street forecasts for sales and earnings. The company notched non-GAAP (adjusted) earnings per share of $0.45 on sales of $1.29 billion in the quarter, topping the average targets for adjusted earnings of $0.40 per share and sales of $1.27 billion.
For the current quarter, Arm is guiding for revenue to come in between $1.36 billion and $1.4 billion. For reference, the average analyst estimate had targeted sales of $1.35 billion for the period. Meanwhile, adjusted earnings for the quarter are projected to be between $0.43 and $0.51 per share -- with the midpoint of that guidance range beating the average Wall Street forecast's call for per-share earnings of $0.45.
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Momentum for the broader market is also boosting Arm stock Concerns about the sustainability of AI-related capital expenditures, increased competition from Chinese companies, and macroeconomic risk factors spurred big sell-offs across the market yesterday, but investors are buying back into stocks today. Chip stocks, including Arm, are seeing particularly strong rebounds. While Arm's business results will play the biggest role in shaping its stock performance over the long term, the market's appetite for the AI trade will continue to have a huge impact on its near-term performance.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Arm Holdings. The Motley Fool has a disclosure policy.
Arm Holdings shares climbed about 8% in trading on Thursday after the British chip designer reported fiscal first-quarter results that topped Wall Street expectations and issued stronger-than-expected guidance.
Analysts broadly welcomed the results, highlighting accelerating demand for Arm’s artificial intelligence-focused processor roadmap despite continued supply constraints.
The company reported fiscal first-quarter revenue of $1.29 billion, up 22% from a year earlier and above analysts’ estimates of $1.26 billion, according to FactSet.
Adjusted earnings came in at 45 cents per share, beating expectations of 40 cents.
Profit rose to $270 million, or 25 cents per share, from $130 million, or 12 cents per share, a year earlier.
Royalty revenue increased 22% to $715 million, driven by more than doubling of data center royalties, while licensing revenue climbed 23% to $574 million.
For the second quarter, Arm forecast adjusted earnings between 43 cents and 51 cents per share on revenue of $1.33 billion to $1.43 billion, ahead of analyst expectations of 44 cents per share on revenue of $1.34 billion.
The company's AI strategy remained the focal point for investors.
Arm said demand for its Arm AGI CPU has exceeded initial expectations, with customer demand now surpassing $2 billion across fiscal 2027 and 2028.
The company added that it has secured manufacturing capacity for initial deployments while continuing to expand production with partners.
Arm also said the transition toward Arm-based AI infrastructure continued during the quarter, citing expanding adoption among major technology companies including Nvidia, Amazon Web Services, Google, Microsoft and Qualcomm.
The company added that shipments of its Neoverse data center processors have surpassed 1.5 billion cores.
Speaking about the growth of AI workloads, Chief Executive Rene Haas told Reuters, "The more inference workloads you run, that creates work that only CPUs can do."
Haas also said, "We have new customers in North America and China," adding, "I feel better about (supply) than I did 90 days ago." Oracle has also agreed to purchase the company's AGI CPU, although Arm did not disclose the value of the agreement.
The company noted that smartphone royalty growth remains softer due to memory shortages, with finance chief Jason Child forecasting second-quarter smartphone royalty growth of roughly 10% to 15%.
Analysts remain positive despite mixed views on valuationJefferies reiterated its Buy rating and maintained a $320 price target, saying Arm's quarterly performance and outlook came in ahead of expectations.
The brokerage said, "Arm's FYQ1 results and FYQ2 guidance are above expectations," adding that the company is increasingly confident of generating more than $1 billion in AGI CPU revenue by FY28. Jefferies noted that while smartphone-driven royalty growth has softened, stronger licensing revenue has offset that weakness. It added that higher average selling prices should help preserve gross margins and said it continues to view Arm as an attractive long-term investment, citing ">40% Agentic AI-led growth to FY31."
J.P. Morgan maintained its Overweight rating and extended its price target timeframe, describing the quarter as "a clean beat across the P&L" that supports a modest increase to Arm's full-year FY27 outlook. The bank also said the company's AGI merchant silicon CPU strategy continues to gain traction following its Arm Everywhere event.
The brokerage said it expects upside to Arm's initial $1 billion AGI CPU revenue framework to emerge, potentially by the third-quarter earnings report, as the company works to expand manufacturing capacity and finalize customer allocations. J.P. Morgan also highlighted management's view that the "$100B FYE30 CPU TAM framework... may have been conservative," suggesting there could be further upside to the company's long-term AI CPU opportunity.
HSBC, however, remained more cautious. The brokerage lowered its price target to $230 from $315 while maintaining a Hold rating, saying, "Management has not actually raised their AGI CPU revenue guidance despite more bullish tone given ongoing uncertainty over foundry capacity constraints." HSBC added that it still sees higher AGI CPU revenue as "the biggest catalyst to earnings upside" and the key issue investors will continue to monitor.
Arm Holdings PLC (NASDAQ:ARM) beat first-quarter revenue and profit estimates and issued upbeat second-quarter guidance, sending its shares up 6.1% in early Thursday trading.
The chip design company reported revenue of $1.29 billion for the quarter, ahead of analyst estimates of $1.26 billion. Adjusted earnings per share came in at $0.45, topping the $0.40 estimate.
License and other revenue reached $574 million, compared with estimates of $562.5 million, while royalty revenue totaled $715 million against expectations of $700.2 million.
Adjusted gross margin held at 98.1%, in line with estimates, and adjusted operating margin came in at 41.2%.
For the second quarter, Arm guided revenue of $1.33 billion to $1.43 billion, above the $1.35 billion analyst estimate. The company forecast adjusted earnings per share of $0.43 to $0.51, compared with estimates of $0.45.
Adjusted net income for the quarter totaled $480 million, ahead of estimates of $433.6 million. Adjusted gross profit was $1.26 billion, while adjusted operating income reached $531 million, topping estimates of $477.3 million. Adjusted operating expenses came in at $733 million, below the $762.5 million estimate.
Key Takeaways ARM reported Q1 revenues of $1.29 billion, with EPS rising 29% year over year.Arm AGI CPU demand exceeded expectations, with customer demand above $2 billion.ARM Neoverse shipments surpassed 1.5 billion cores as data center royalties more than doubled. Arm Holdings plc (ARM - Free Report) delivered a record first quarter of fiscal 2027 as management highlighted accelerating demand for its compute platform across AI infrastructure, edge devices and physical AI applications. The company emphasized rising customer interest in its Arm AGI CPU and continued momentum in data center adoption.
The earnings call also showed how Arm is balancing new silicon opportunities with its core IP business, while addressing supply constraints, smartphone weakness and longer-term AI compute demand.
ARM Expands AI CPU OpportunityCEO Rene Haas said that Arm AGI CPU demand has exceeded the company’s initial expectations, with customer demand now above $2 billion across fiscal 2027 and fiscal 2028. The company previously outlined a $1 billion opportunity.
Haas said that Arm Holdings has delivered initial products to multiple customers and increased confidence in securing manufacturing capacity needed to support higher demand. He noted that supply efforts involve wafers, substrates, memory and testing capacity.
The company is working with manufacturing and supply chain partners to expand capacity. CFO Jason Child said that Arm expects to provide additional visibility on revenue and margin potential after the third quarter.
Arm Advances Data Center GrowthARM continued to highlight the transition of AI infrastructure toward its architecture. Haas said that data center royalties more than doubled year over year as adoption of Arm Neoverse expanded.
The company reported that Arm Neoverse shipments surpassed 1.5 billion cores, with the latest 500 million cores shipped within nine months. Management pointed to broader adoption among major AI infrastructure providers.
Child added that cloud AI remained the largest driver of royalty growth. He said deployments of Arm-based server chips and networking products helped offset softness in some consumer markets.
ARM Reports Strong Q1ARM reported fiscal first-quarter revenues of $1.29 billion, up 22% year over year, while non-GAAP EPS reached $0.45, up 29% year over year. The results exceeded the Zacks Consensus Estimate for revenues and EPS of $1.27 billion and $0.40, respectively.
Royalty revenues increased 22% year over year to $715 million, while licensing and other revenues rose 23% to $574 million. Annualized contract value increased 13% to $1.732 billion.
Non-GAAP operating income was $531 million, producing a 41.2% operating margin. Non-GAAP free cash flow reached $665 million during the quarter.
Arm Addresses Investor QuestionsA Wells Fargo analyst asked about the company’s confidence in expanding AGI CPU supply beyond the initial $1 billion opportunity. Haas said that confidence improved due to progress across multiple supply chain areas.
A William Blair analyst questioned smartphone royalty trends amid higher memory costs. Management said smartphone market weakness has been partly offset by stronger royalty rates from Armv9 and compute subsystem adoption.
A Bank of America analyst asked about proprietary AI accelerators and Arm’s role in future systems. Haas said that Arm CPUs can work alongside custom accelerators and highlighted opportunities through broader ecosystem approaches.
ARM Provides Fiscal OutlookFor the second quarter of fiscal 2027, ARM expects revenues of $1.38 billion, plus or minus $50 million. Management expects license and other revenue growth of about 30% year over year.
The company expects non-GAAP operating expenses of approximately $780 million and non-GAAP EPS of $0.47, plus or minus $0.04.
Management noted that royalty growth expectations have moderated from earlier assumptions due to smartphone pressure, but continued cloud AI strength remains a key growth driver.
Arm Maintains AI Growth FocusArm entered fiscal 2027 focused on expanding its role across cloud infrastructure, edge computing and physical AI. Management emphasized that customers can adopt the platform through IP, compute subsystems or silicon.
Haas said the company’s priorities remain scaling AGI CPU production, expanding capacity and supporting long-term AI compute demand.
The company’s commentary reflected continued investment in engineering and technology development while maintaining profitability and cash generation.
ARM’s Zacks Rank and Style ScoreARM carries a Zacks Rank #3 (Hold) at present, indicating that the stock’s earnings estimate revision trend is currently consistent with a neutral outlook. The Zacks Rank can change as analysts update earnings estimates following new company developments and quarterly results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has a Value Score of F, a Growth Score of C, a Momentum Score of C and a VGM Score of D. The Zacks Style Score evaluates value, growth and momentum characteristics, with higher grades indicating stronger relative attributes.
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
3 European Stocks to Carry Investors Through the Back Half of 2026ARM NASDAQ: ARM reported record first-quarter fiscal 2027 results, with revenue rising 22% year over year to $1.29 billion as demand for its computing platform expanded across cloud AI infrastructure, edge devices and physical AI applications.
Chief Executive Officer Rene Haas said the company delivered record first-quarter licensing and royalty revenue. Royalty revenue increased 22% to $715 million, while licensing revenue rose 23% to $574 million. Non-GAAP earnings per share increased 29% to $0.45, above the high end of the company’s guidance.
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SpaceX Gets the Attention, But These 4 Stocks Could Get the Returns“AI is changing where and how compute happens,” Haas said, pointing to the continued transition toward Arm-based systems in data centers as well as growing applications in PCs, smartphones, vehicles, robotics and industrial systems.
Data Center Momentum Drives Royalty Growth Chief Financial Officer Jason Child said cloud AI remained the largest driver of royalty growth, with data center royalty revenue more than doubling year over year. The company cited continued deployments of Arm-based server chips by hyperscale customers, along with networking products such as data processing units and SmartNICs.
Arm's New Gambit: Building Chips to Challenge the AI TitansArm said Neoverse shipments have surpassed 1.5 billion cores, with the latest 500 million cores shipping in nine months, compared with six years for the first 1 billion. Haas highlighted several customer developments, including NVIDIA bringing its Arm-based Vera CPU into production, Google’s use of its Arm-based Axion CPU in AI infrastructure and AWS plans to deploy tens of millions of Graviton5 cores for agentic AI workloads.
Microsoft expanded Azure Cobalt 200 virtual machines built on Arm Neoverse Compute Subsystems, while Qualcomm announced plans to enter the AI data center CPU market with its Arm-based Dragonfly C1000, according to Haas.
Child said edge AI royalty revenue continued to grow despite softness in the smartphone market. The company has benefited from higher royalty rates as Armv9 and Compute Subsystems gain greater penetration in smartphones, tablets and other consumer electronics.
However, management said elevated memory prices have pressured handset demand across market segments. Haas said Arm has been partially insulated from weaker unit sales because a larger share of customers are using Armv9 and Compute Subsystems, which carry higher royalty rates.
Child said the company now expects full-year royalty growth to be closer to the high teens, versus prior expectations of about 20%, while maintaining that cloud AI growth is helping offset smartphone weakness. For the second quarter, Arm expects royalty revenue growth in the low teens.
AGI CPU Demand Exceeds $2 Billion Arm also updated investors on its Arm AGI CPU business, introduced in March as another way for customers to deploy the Arm compute platform. Haas said initial products have been delivered to multiple customers and the company has secured manufacturing capacity to support the previously outlined $1 billion opportunity across fiscal 2027 and fiscal 2028.
Demand has now exceeded $2 billion, according to Haas, as Arm adds customers in the U.S. and China and expands its pipeline. The company is working with manufacturing and supply-chain partners to increase available capacity.
“Our confidence in achieving upside to our $1 billion opportunity for the Arm AGI CPU business has increased in the past 90 days,” Haas said.
Management said supply remains constrained across wafers, substrates, testing capacity and memory, but Arm has become more confident in its ability to secure the components needed to support revenue above $1 billion. The company plans to provide a more detailed update during its fiscal third-quarter results, when it expects to have better visibility into the fourth quarter of fiscal 2027 and fiscal 2028.
Child said initial gross margin expectations for the AGI CPU business remain unchanged, at high-30% to low-40% levels for the first generation. He said Arm expects margins to reach 50% over the next couple of years as it brings more work in-house.
Haas said the 128-core Arm AGI CPU can address traditional servers, head-node applications and agentic AI workloads. While he did not provide details on future product specifications, he said the industry trend is toward CPUs with more cores to support agentic workloads more efficiently.
Licensing Activity and Profitability Licensing and other revenue reached $574 million, including $193 million from Arm’s technology licensing and design-services agreement with SoftBank. Child said the company expects the quarterly run rate from that agreement to be around $200 million for the remainder of the year.
Arm signed multiple high-value agreements during the quarter as existing customers renewed long-term licenses, according to Child. The agreements included customers in hyperscale computing, automotive, robotics and handset markets seeking access to Arm’s future technology roadmap.
Annualized contract value, which Arm uses as an indicator of underlying licensing trends, increased 13% year over year. Child said that pace remains above the company’s long-term expectation for licensing revenue growth.
Non-GAAP operating expenses rose 18% to $733 million, largely reflecting research and development investment. The result was about $27 million below the company’s guidance because of timing related primarily to tool utilization, including emulation and cloud spending, Child said.
Non-GAAP operating income was $531 million, producing an operating margin of about 41%, up 200 basis points year over year. Arm generated $665 million in free cash flow during the quarter and $1.4 billion over the trailing 12 months.
Second-Quarter Outlook For the fiscal second quarter, Arm forecast:
Revenue of $1.38 billion, plus or minus $50 million. Year-over-year revenue growth of about 22% at the midpoint. Licensing and other revenue growth of about 30% year over year. Royalty revenue growth in the low teens year over year. Non-GAAP operating expenses of approximately $780 million. Non-GAAP earnings per share of $0.47, plus or minus $0.04. Haas said Arm’s core IP business continues to perform strongly, led by data center expansion, while the newly introduced AGI CPU business represents a second growth driver. “The confidence level we have in the success of that product only continues to increase,” he said.
About ARM (NASDAQ:ARM)Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.
Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.
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CAMBRIDGE, England--(BUSINESS WIRE)--Arm Holdings plc (NASDAQ: ARM), the company that is building the future of computing, has today published a letter to its shareholders containing the company's results for its first quarter of fiscal year 2027, which ended June 30, 2026. The letter is available on its investor relations website (https://investors.arm.com/financials/quarterly-annual-results). The shareholder letter will also be furnished to the Securities and Exchange Commission (SEC) on a For.
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.
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.
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Live Coverage Updates appear automatically as they are published.
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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
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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
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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
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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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The AI industry extends its losses amid a selloff in South Korean markets, spurred by concerns about AI infrastructure and Chinese competition.
Technical AnalysisFrom a trend perspective, ARM is trading 16.3% below its 20-day SMA ($293.32) and 24.1% below its 50-day SMA ($323.51), which tells you the intermediate trend has been under pressure. At the same time, it’s still 30.1% above its 200-day SMA ($188.84) and just 0.4% above its 100-day SMA ($244.77), so the longer-term uptrend hasn’t fully broken—but it’s now leaning on a key "line in the sand" area.
Earnings & Analyst OutlookThe countdown is on: Arm Holdings plc American Depositary Shares is set to report earnings on July 29, 2026 (confirmed).
EPS Estimate: 36 cents (Up from 35 cents YoY) Revenue Estimate: $1.27 Billion (Up from $1.05 Billion YoY) Valuation: P/E of 313.3x (Indicates premium valuation relative to peers) Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $306.74 (high target $500.00, low target $140.00) across 50 analysts. Recent analyst moves include:
Wells Fargo: Overweight (Lowers Forecast to $350.00) (July 22) Susquehanna: Positive (Raises Forecast to $320.00) (July 21) UBS: Buy (Lowers Forecast to $360.00) (July 20) Top ETF ExposureSignificance: Because ARM carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
ARM Price Action: ARM Holdings shares were down 7.41% at $246.60 at the time of publication on Tuesday, according to Benzinga Pro data.
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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.
Arm Holdings (NASDAQ:ARM | ARM Price Prediction) enters Wednesday’s Q1 FY2027 earnings with its stock down nearly 28% over the past month. Meanwhile, the company has already booked more than $2 billion in demand for its new AGI data center CPU across fiscal 2027 and 2028, giving investors a measurable catalyst behind the next phase of growth.
Arm Has Already Booked $2 Billion in AI CPU Demand On the Q4 earnings call, CEO Rene Haas confirmed “more than $2 billion of customer demand across fiscal 2027 and fiscal 2028″ for the Arm AGI CPU, double what was announced at launch six weeks earlier. Meta is the lead co-developer.
OpenAI, Cerebras, SAP, and Cloudflare are integrating. The data center CPU TAM is expected to be over $100 billion by 2030, and Arm currently holds roughly 50% CPU compute share among top hyperscalers. Data center royalty more than doubled year-over-year in FY2026 and is expected to double again in FY2027.
With 27 buy ratings against 2 sells and an average analyst price target of $300.73, $ARM appears to offer upside from its current price of $254.50.
Free Cash Flow Nearly Quintupled Last Year FY2026 free cash flow reached $882 million, up 395.51% year-over-year, with operating cash flow of $1.524 billion (+283.88%) and gross margin at 92.48%. This is Arm’s third consecutive year of 20%+ revenue growth, with $4.92 billion in FY2026 revenue (+22.79% YoY). ACV climbed 22% YoY to $1.66 billion, giving forward visibility on the licensing base before royalties compound.
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Why Nvidia’s AI Growth Also Benefits Arm NVIDIA’s (NASDAQ:NVDA) next-generation Vera CPU is Arm-based, so every Vera rack pays Arm a royalty. NVIDIA already trades at a premium valuation, meaning that a marginal dollar of AI infrastructure spend is more valuable on Arm’s smaller $277.71 billion market cap.
Qualcomm (NASDAQ:QCOM) looks cheaper than ARM at a lower P/E multiple, but revenue fell 3.5% in its most recent quarter, and QCOM has a gross margin of 55.4% versus Arm’s 92%.
Lower Margins Are Funding Arm’s Next Growth Engine Arm’s higher R&D spending is pressuring near-term margins, but it is also funding a data center business that management expects to reach $15 billion in annual revenue by FY2031. With free cash flow up nearly 400%, more than $2 billion in AGI CPU demand already booked, and the stock down 28% in one month, Wednesday’s earnings could reveal whether the pullback has created a buying opportunity.
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ARM (NASDAQ:ARM – Get Free Report) and Credo Technology Group (NASDAQ:CRDO – Get Free Report) are both large-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.
Institutional & Insider Ownership 7.5% of ARM shares are owned by institutional investors. Comparatively, 80.5% of Credo Technology Group shares are owned by institutional investors. 11.8% of Credo Technology Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations This is a summary of recent recommendations and price targets for ARM and Credo Technology Group, as provided by MarketBeat.com.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score ARM 1 8 17 0 2.62 Credo Technology Group 0 2 15 2 3.00 ARM presently has a consensus target price of $297.65, suggesting a potential upside of 14.48%. Credo Technology Group has a consensus target price of $266.17, suggesting a potential upside of 24.87%. Given Credo Technology Group’s stronger consensus rating and higher possible upside, analysts plainly believe Credo Technology Group is more favorable than ARM.
Earnings and Valuation This table compares ARM and Credo Technology Group”s gross revenue, earnings per share (EPS) and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio ARM $4.92 billion 56.45 $904.00 million $0.84 309.54 Credo Technology Group $1.34 billion 29.77 $472.28 million $2.48 85.95 ARM has higher revenue and earnings than Credo Technology Group. Credo Technology Group is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk ARM has a beta of 3.76, indicating that its share price is 276% more volatile than the S&P 500. Comparatively, Credo Technology Group has a beta of 3.2, indicating that its share price is 220% more volatile than the S&P 500.
Profitability This table compares ARM and Credo Technology Group’s net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets ARM 18.37% 12.43% 9.48% Credo Technology Group 35.37% 32.30% 28.88% Summary Credo Technology Group beats ARM on 9 of the 15 factors compared between the two stocks.
About ARM (Get Free Report)
Arm Holdings Plc engages in the licensing, marketing, research, and development of microprocessors, systems IP, graphics processing units, physical IP and associated systems IP, software, and tools. It operates through the following geographical segments: United Kingdom, United States, and Other Countries. The company was founded on November 12, 1990 and is headquartered in Cambridge, the United Kingdom.
About Credo Technology Group (Get Free Report)
Credo Technology Group Holding Ltd provides various high-speed connectivity Credo Technology Group Holding Ltd provides various high-speed connectivity solutions for optical and electrical Ethernet applications in the United States, Taiwan, Mainland China, Hong Kong, and internationally. Its products include HiWire active electrical cables, optical digital signal processors, low-power line card PHY, serializer/deserializer (SerDes) chiplets, and SerDes IP, as well as integrated circuits, active electrical cables. The company also offers intellectual property solutions consist of SerDes IP licensing. It sells its products to hyperscalers, original equipment manufacturers, original design manufacturers and optical module manufacturers, as well as into the enterprise and HPC markets. The company was founded in 2008 and is based in Grand Cayman, Cayman Islands.
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Arm Holdings (ARM -8.02%) has more than doubled year to date and sits at a market cap above $300 billion. There's still a big gap between its current valuation and the $1 trillion milestone, but AI tailwinds could potentially push the stock to this benchmark within a few years.
A vast intellectual property (IP) portfolio tied directly to AI infrastructure and surging demand for central processing units (CPUs) has propelled the stock, and these catalysts could extend the rally.
Image source: Getty Images.
The IP portfolio provides high-margin recurring revenue Almost all of Arm's revenue comes from its IP portfolio. The company designs key components for smartphones, laptops, AI data centers, 5G, and other high-demand applications. Artificial intelligence has been the major revenue driver recently.
Overall revenue reached $4.92 billion in its fiscal 2026, which was up by 23% year over year. It represented the company's third consecutive fiscal year of more than 20% revenue growth.
Arm makes royalties from various tech giants that are selling AI chips, including Nvidia (NVDA -1.51%). Companies will pay Arm for its intellectual property so they can produce high-demand products.
Arm's business model resembles a LEGO instruction booklet. Without that booklet, you can't build the LEGO displayed on the box. Since the instruction booklet covers products critical to AI infrastructure and consumer devices, Arm can charge a high premium to companies that want to use it legally.
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CPU demand is heating up Although Arm has made almost all of its revenue from licenses and royalties, the company recently said it would enter the hardware industry and create its own CPUs.
The company's vast intellectual property has established it as a leader in the industry. That will make it easier for Arm to penetrate the CPU industry with its own hardware. Arm made this announcement in March and already has more than $2 billion of customer demand across fiscal 2027 and fiscal 2028.
Arm expects data centers to become the largest part of its business. Licensing and royalty fees will continue to operate in the background, but CPUs are expected to be the major catalyst for future years.
In that case, Arm Holdings has a real shot at becoming a $1 trillion company within a few years. The demand for agentic AI certainly works in the company's favor, since AI agents need more CPUs. That has shifted the CPU-to-GPU ratio in favor of CPUs.
Currently, the CPU-to-GPU ratio is between 1:4 and 1:8, according to TrendForce. That means a data center usually has four to eight GPUs for each CPU. The future ratio is expected to shift closer to 1:1 or 1:2.
That means CPU demand can quickly quadruple. Arm is well-positioned to ride that momentum. If it does, and the stock follows suit, Arm would be worth more than $1 trillion before 2030. It's a tall order for a stock already priced at 60x trailing sales, but still a plausible growth story.
Key Takeaways ARM's processor architecture could benefit from rising demand for efficient AI computing infrastructure.ARM's royalty model allows growth across smartphones, data centers, automotive and edge devices.ARM supports AI expansion through its ecosystem, licensing model and next-generation computing markets. While investor enthusiasm surrounding artificial intelligence has pushed valuations across the semiconductor sector higher, Arm Holdings’ (ARM - Free Report) long-term opportunity is supported by more than short-term AI excitement. The company’s potential lies in the expanding adoption of its architecture across a broader range of computing markets, which could create durable growth opportunities as AI workloads continue evolving.
Unlike companies focused primarily on AI accelerators or networking solutions, ARM provides the underlying processor architecture that enables efficient computing across a wide range of applications. As enterprises and cloud providers increasingly prioritize energy-efficient infrastructure, demand for ARM-based processors could accelerate, particularly in areas where performance per watt becomes a critical factor.
A key advantage for Arm Holdings is its royalty-driven business model. As more customers adopt Arm-based designs and deploy products across smartphones, data centers, automotive systems and edge devices, the company can benefit from expanding royalty streams without requiring the same level of capital investment as traditional chip manufacturers. This creates the potential for sustainable revenue growth as adoption increases.
The company’s AI opportunity also extends beyond a single market. The rise of customized silicon, AI-enabled devices and specialized computing workloads creates additional avenues for ARM’s architecture to gain broader acceptance. As more industries integrate AI into their operations, the need for efficient and scalable computing solutions could strengthen demand for Arm Holdings’ technology.
Although investor expectations remain high, ARM’s AI opportunity is supported by structural industry trends rather than hype alone. The company’s ecosystem, licensing model and expanding presence across next-generation computing markets provide a foundation for long-term 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 159% year to date, significantly outperforming the industry’s 35% rally.
Image Source: Zacks Investment Research
From a valuation standpoint, ARM trades at a forward price-to-sales ratio of 45.66X, well above the industry’s 13.56X. 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 Holdings (ARM) gained another sign of momentum in the AI race after IDC reported that Arm-based rack-scale GPU servers have overtaken x86 systems as the lea
Key Takeaways Coherent is benefiting from AI-driven demand, record backlog and rising margins.COHR is expected to deliver stronger sales and earnings growth than ARM, with upward EPS estimate revisions.COHR offers a more attractive valuation and upside, while ARM's premium valuation limits near-term potential. Both Coherent Corp. (COHR - Free Report) and Arm Holdings (ARM - Free Report) are technology companies whose business models focus heavily on advanced hardware and innovation at the core of modern computing.
ARM is best known for its semiconductor IP, providing chip architectures that power a vast share of smartphones, servers and increasingly AI-focused processors. COHR, on the other hand, operates in the realm of photonics, lasers and optical components, enabling the ultra-fast connectivity and precision manufacturing that form the backbone of today’s data and electronics industries.
The two companies compete for investor interest in high-growth, innovation-driven segments of the tech infrastructure ecosystem.
COHR’s CaseCoherent's transformation has been fueled by booming demand for AI infrastructure. The company's Datacenter & Communications segment has become its primary growth engine, accounting for 75% of third-quarter fiscal 2026 revenues while delivering 41% year-over-year growth.
This shift is significant because it changes the company's revenue profile. Historically, hardware manufacturers have been exposed to short product cycles and volatile demand. Today, Coherent is increasingly tied to long-duration AI infrastructure spending, providing investors with greater confidence in future earnings.
Unlike traditional semiconductor hardware cycles, AI-related investments are supported by large-scale cloud deployments and multi-year capital spending plans, making demand considerably more predictable.
One of the biggest positives for Coherent is the dramatic improvement in order visibility.
Rather than experiencing the typical cyclical increase in hardware demand, the company is witnessing a step-change in customer commitments. Record backlog levels now extend into calendar 2028, while long-term supply agreements stretch through 2030.
This level of visibility substantially lowers the risk that new manufacturing investments become underutilized during an economic slowdown.
To support this unprecedented demand, Coherent invested approximately $290 million in capital expenditures during the third quarter of fiscal 2026, more than doubling spending from the prior-year period.
Importantly, this aggressive capacity expansion is backed by contractual customer commitments rather than speculative demand forecasts.
The surge in AI-related demand is translating directly into stronger profitability for COHR.
Higher factory utilization and improved supply chain efficiencies contributed to a 163-basis-point expansion in the adjusted operating margin during the third quarter. Meanwhile, adjusted net income climbed nearly 56% year over year, highlighting the operating leverage created by rising production volumes.
As manufacturing assets become increasingly utilized, incremental revenues are flowing through to earnings at a faster pace, improving the overall quality of Coherent's financial performance.
This combination of expanding margins and stronger earnings suggests the company is benefiting not only from higher sales but also from greater operational efficiency.
ARM’s CaseARM 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 Holdings' 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.
While 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.
How Do Zacks Estimates Compare for COHR & ARM?The Zacks Consensus Estimate for COHR’s fiscal 2026 sales and EPS indicates year-over-year growth of 22% and 55%, respectively. EPS estimates have been trending upward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ARM’s current-year sales suggests 20% year-over-year growth, while EPS is expected to grow 19%. EPS estimates have been trending downward over the past 60 days.
Image Source: Zacks Investment Research
COHR’s Valuation Reflects Strong Growth PotentialWhile COHR appears attractively valued with a forward 12-month P/E of 36.5X versus its median of 39.2X, ARM's higher forward P/E of 120.7X, below its median of 122.9X, reflects investor confidence in its strong earnings growth potential.
Why Coherent Appears to Be the Better PickWhile both companies are well positioned to benefit from the AI infrastructure buildout, Coherent emerges as the more compelling investment. The company combines accelerating demand, improving profitability, and exceptional revenue visibility through long-term customer commitments, reducing the uncertainty typically associated with hardware businesses. Its expanding role in AI networking infrastructure provides exposure to a critical segment of the AI ecosystem, while operational efficiencies continue to enhance earnings quality. Although Arm possesses a powerful competitive moat, its premium valuation and moderating earnings outlook leave less room for upside. Coherent offers a stronger balance of growth, visibility, and valuation.
While COHR carries a Zacks Rank #2 (Buy), 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.
