Arm Holdings (NasdaqGS:ARM): Is the Stock Overvalued After Its Recent Outperformance?

Arm Holdings (ARM) has quietly outperformed the broader semiconductor space this week, adding just under 1% in a single session and roughly 6% over the past week despite a weaker month.

See our latest analysis for Arm Holdings.

At around $140 per share, Arm’s roughly 10% year to date share price return and modest 1 year total shareholder return suggest momentum has cooled lately, even as investors still price in healthy long term growth potential.

If Arm’s recent swing has you rethinking your tech exposure, now is a good moment to explore other high growth tech and AI names via high growth tech and AI stocks.

With revenue and earnings still growing at a double digit clip and the share price sitting below consensus targets, investors face a key question: is Arm quietly undervalued here, or is the market already baking in years of AI led expansion?

Most Popular Narrative: 100.7% Overvalued

With Arm closing at about $140 versus a narrative fair value near $70, the gap between market price and fundamentals is front and center.

ARM Holdings continues to benefit from its irreplaceable role in the global semiconductor ecosystem, powering everything from smartphones to AI edge devices. Based on a forward earnings framework anchored to the 10 year U.S. Treasury yield, the stock’s intrinsic fair value is estimated at $70 per share.

Read the complete narrative.

Curious how this narrative jumps from core chip royalties to that bold fair value call. The secret lies in growth pacing, margin resilience, and a strikingly rich future earnings multiple. Want to see the exact assumptions that turn those moving parts into that final price tag.

Result: Fair Value of $70 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if AI demand slows or higher rates compress multiples, Arm’s premium could quickly normalize and challenge the case for an extended bubble phase.

Find out about the key risks to this Arm Holdings narrative.

Build Your Own Arm Holdings Narrative

If this view does not quite fit your own research instincts, you can dive into the numbers yourself and build a custom take in minutes: Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Arm Holdings.

Ready for your next investing edge

Arm might be the headline today, but your next winning idea could be hiding in plain sight; use the Simply Wall St Screener so you do not miss it.

• Target reliable cash returns by reviewing these 15 dividend stocks with yields > 3% that can help anchor your portfolio with income while markets stay volatile.
• Capture the next wave of innovation by scanning these 26 AI penny stocks positioned at the heart of the AI transformation.
• Position yourself early in emerging trends by checking out these 81 cryptocurrency and blockchain stocks before the market attention fully turns back to them.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com