Arm Holdings plc (ARM), currently trading at $159.55 per share, has experienced significant growth, driven by its energy-efficient chip designs that dominate the mobile phone market and its strategic involvement in artificial intelligence (AI) infrastructure projects. The company's recent designation as a technology partner in a $500 billion AI infrastructure project has further boosted its market position. Analysts have set a 12-month average price target of $160.93, with estimates ranging from $100.00 to $180.00, indicating a cautiously optimistic outlook.

While Arm's strong partnerships with major tech firms like Microsoft and OpenAI enhance its prospects, ongoing legal disputes, such as the recent lawsuit with Qualcomm over licensing agreements, could pose challenges.

If Arm continues to capitalize on the growing demand for AI and maintains its leadership in chip design, the stock could appreciate to $180–$200 per share by the end of 2025. Conversely, setbacks in legal battles or failure to innovate may limit the stock's performance to the $140–$160 range.

How well do narratives help inform your perspective?

Disclaimer

The user M_Kabesh has a position in NasdaqGS:ARM. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.