Update shared on04 Sep 2025
Analysts remain divided on Arm Holdings, with bulls citing strong market expansion and AI-driven revenue growth while bears caution against the stock's demanding valuation and macro risks, ultimately leaving the consensus price target unchanged at $152.59.
Analyst Commentary
- Bullish analysts cited Arm’s expanding market penetration and growing content offerings, expecting the company to extract a larger share of value across new and existing markets.
- Multiple upward price target revisions reflected both higher revenue estimates, particularly related to increased data center and AI server demand, and broader re-rating of the semiconductor sector post-recent selloff.
- Some analysts acknowledged positive Q1 results and stronger 2026 revenue projections, but noted concerns over rising operating expenses.
- Neutral and bearish analysts pointed out Arm’s now “extremely demanding” valuation after significant share price appreciation, suggesting a good moment for profit-taking.
- Sentiment remains mixed due to macroeconomic factors, with some analysts noting that sector momentum—driven by retail trading and FX tailwinds—may not align with weaker underlying corporate IT demand, which limits further upside.
What's in the News
- Arm Holdings hired Amazon’s AI chip director Rami Sinno to strengthen its chip development capabilities (Reuters).
- The company plans to invest part of its profits into producing its own chips and components, expanding beyond its traditional focus on chip design (Reuters).
- CEO Rene Haas stated that finished chips represent an extension of Arm's existing Compute Sub Systems products and the company is considering manufacturing chiplets and complete solutions (Reuters).
- Arm’s recently issued quarterly guidance disappointed shareholders due to the increased investment in developing its own chips (Reuters).
- For the second quarter of 2026, Arm expects revenue between $1.01 billion and $1.11 billion (Key Developments).
Valuation Changes
Summary of Valuation Changes for Arm Holdings
- The Consensus Analyst Price Target remained effectively unchanged, at $152.59.
- The Discount Rate for Arm Holdings remained effectively unchanged, at 10.79%.
- The Consensus Revenue Growth forecasts for Arm Holdings remained effectively unchanged, at 21.5% per annum.
Disclaimer
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