Arm Holdings (NasdaqGS:ARM) Valuation Check as New AI Chip Division and Neoverse CPUs Gain Traction

Arm Holdings (NasdaqGS:ARM) is back in focus after management doubled down on AI infrastructure, spotlighting its Neoverse V-Series CPUs and confirming plans for a dedicated AI chip division with prototypes targeted for 2025.

See our latest analysis for Arm Holdings.

Despite the buzz around Arm’s AI roadmap, the stock has cooled off lately, with a 30 day share price return of minus 9.08 percent and a 1 year total shareholder return of minus 8.01 percent, suggesting momentum has faded after an earlier run up.

If Arm’s AI push has you rethinking your tech exposure, this could be a smart moment to explore other high growth tech and AI stocks that might complement or balance your portfolio.

With revenue and earnings still growing briskly and the share price pulling back from earlier highs, the key question now is whether Arm looks mispriced for its AI upside or whether the market has already priced in tomorrow’s growth.

Most Popular Narrative Narrative: 94.5% Overvalued

With Arm last closing at $136.14 against a narrative fair value near half that level, the gap between price and thesis is striking.

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. Applying a prudent 20% discount to reflect interest rate risk and macro uncertainty yields a conservative, risk adjusted target of $56.

Read the complete narrative.

Want to see what powers that steep markdown from today’s price? The narrative leans on future earnings, compressed margins, and a demanding profit multiple. Curious which assumptions do the heavy lifting in that model? Read on to unpack the full valuation blueprint.

Result: Fair Value of $70.0 (OVERVALUED)

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

However, surprise upside from AI chip demand or faster margin expansion could sustain today’s valuation, especially if rates ease and risk appetite remains resilient.

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

Build Your Own Arm Holdings Narrative

If you are not on board with this view, or simply prefer hands-on research, you can build a custom narrative in minutes: Do it your way

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

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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.

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