Update shared on 28 Nov 2025
Fair value Increased 0.75%Arm Holdings' fair value estimate has been raised by analysts to $167.97 from $166.72. This change reflects solid quarterly results, expanded AI initiatives, and continued licensing and royalty growth.
Analyst Commentary
Analyst perspectives on Arm Holdings continue to evolve in light of the company’s recent performance and strategic initiatives. Several institutions have updated their outlooks, reflecting both the strengths and the risks associated with Arm's trajectory.
Bullish Takeaways- Bullish analysts are raising price targets, citing solid quarterly earnings that surpassed guidance and demonstrated robust revenue momentum beyond the current year.
- Recent reports highlight strong growth in licensing and royalty revenues, particularly tied to design wins and expanding applications in artificial intelligence from edge to cloud.
- AI momentum is seen as a key driver, with increased investment and new initiatives expected to enable higher value capture and sustained market relevance.
- Upward revisions to revenue growth forecasts, especially for fiscal 2026, are being driven by significant uptake in data center and AI-related royalties.
- Bearish analysts note that Arm’s plans to broaden its business into the fabless semiconductor space introduce new operational risks that could impact profitability and execution certainty.
- Concerns remain that during Arm’s transition, the market may penalize its valuation multiple until new initiatives demonstrate sufficient returns.
- Increased operating expenses, particularly as Arm pursues a greater number of AI projects, may weigh on margins in the near term and temper investor enthusiasm.
What's in the News
- South Korean antitrust officials conducted unannounced inspections at Arm's Seoul offices as part of an inquiry into its licensing practices, following a complaint by Qualcomm that alleges unfairly restricted technology access (Bloomberg).
- SoftBank reportedly considered a potential takeover of Marvell earlier this year and explored options to combine Marvell with Arm. However, talks did not result in an agreement (Bloomberg).
- OpenAI is collaborating with Arm to develop a CPU to work alongside a new AI chip being produced with Broadcom. TSMC is set to handle manufacturing (The Information).
- SoftBank is negotiating a $5 billion margin loan backed by shares of Arm Holdings, intended to fund additional investment in OpenAI and potentially raising its total margin loans secured by Arm shares to $18.5 billion (Bloomberg).
- Qualcomm has adopted the latest Arm computing architecture in its chips, integrating new features to improve AI performance and competitiveness against rivals (Reuters).
Valuation Changes
- Fair Value Estimate has risen slightly from $166.72 to $167.97.
- Discount Rate has decreased modestly, moving from 11.26% to 11.15%.
- Revenue Growth Forecast has edged up marginally from 22.14% to 22.14%.
- Net Profit Margin is now higher, increasing from 30.46% to 30.78%.
- Future P/E Ratio has declined from 102.30x to 100.86x.
Disclaimer
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