ARM (NASDAQ:ARM) Price Target Cut to $340.00 by Analysts at Royal Bank Of Canada

Key Points

• Royal Bank of Canada cut ARM’s price target to $340 from $475 but maintained an “outperform” rating, implying 42.63% upside from the reported $238.38 share price.
• ARM exceeded quarterly expectations, reporting $1.29 billion in revenue, up 22.4% year over year, and EPS of $0.45 versus the $0.40 consensus estimate. Management also issued stronger-than-expected second-quarter guidance, supported by AI and data-center demand.
• Analyst sentiment remains broadly positive, with 18 Buy ratings and an average price target of $285.25, though ARM’s valuation is demanding and insiders have sold roughly $52.1 million of stock over the past three months.

ARM (NASDAQ:ARM - Get Free Report) had its target price decreased by equities researchers at Royal Bank Of Canada from $475.00 to $340.00 in a report released on Thursday,Benzinga reports. The brokerage currently has an "outperform" rating on the stock. Royal Bank Of Canada's price objective would suggest a potential upside of 42.63% from the stock's current price.

A number of other brokerages also recently issued reports on ARM. Mizuho raised their price objective on ARM from $425.00 to $500.00 and gave the stock an "outperform" rating in a research report on Monday, June 8th. Benchmark began coverage on shares of ARM in a report on Thursday, July 16th. They set a "hold" rating for the company. Needham & Company LLC reaffirmed a "buy" rating and issued a $255.00 price objective on shares of ARM in a research note on Thursday. Deutsche Bank Aktiengesellschaft reissued a "hold" rating on shares of ARM in a research note on Thursday, May 7th. Finally, The Goldman Sachs Group upped their price target on shares of ARM from $125.00 to $150.00 and gave the company a "sell" rating in a research report on Thursday, May 7th. Eighteen analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, ARM currently has an average rating of "Moderate Buy" and an average price target of $285.25.

ARM Price Performance

NASDAQ ARM traded up $13.48 on Thursday, reaching $238.38. The company had a trading volume of 8,886,305 shares, compared to its average volume of 8,578,546. The firm has a market cap of $254.60 billion, a price-to-earnings ratio of 283.85, a P/E/G ratio of 7.61 and a beta of 3.76. ARM has a fifty-two week low of $100.02 and a fifty-two week high of $452.70. The business has a 50 day moving average of $331.09 and a two-hundred day moving average of $211.79.

ARM (NASDAQ:ARM - Get Free Report) last announced its earnings results on Thursday, July 30th. The company reported $0.45 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.40 by $0.05. The business had revenue of $1.29 billion during the quarter, compared to analyst estimates of $1.26 billion. ARM had a return on equity of 12.43% and a net margin of 18.37%.ARM's revenue for the quarter was up 22.4% compared to the same quarter last year. During the same period last year, the company earned $0.35 EPS. As a group, research analysts predict that ARM will post 1.12 earnings per share for the current fiscal year.

Insider Buying and Selling

In other ARM news, insider Charlotte Claire Eaton sold 7,805 shares of ARM stock in a transaction on Thursday, May 21st. The shares were sold at an average price of $290.01, for a total transaction of $2,263,528.05. Following the transaction, the insider directly owned 5,000 shares of the company's stock, valued at $1,450,050. The trade was a 60.95% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CAO Laura Kathleen Bartels sold 11,306 shares of the stock in a transaction dated Tuesday, June 2nd. The shares were sold at an average price of $392.70, for a total transaction of $4,439,866.20. Following the completion of the sale, the chief accounting officer owned 12,135 shares of the company's stock, valued at approximately $4,765,414.50. This represents a 48.23% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 216,049 shares of company stock worth $52,101,605.

Institutional Trading of ARM

Institutional investors and hedge funds have recently modified their holdings of the business. Rathbones Group PLC raised its position in ARM by 4,638.8% in the fourth quarter. Rathbones Group PLC now owns 500,043 shares of the company's stock worth $54,660,000 after acquiring an additional 489,491 shares during the period. Paragon Capital Management Inc. purchased a new position in ARM in the fourth quarter valued at approximately $826,000. Zurcher Kantonalbank Zurich Cantonalbank lifted its stake in ARM by 34.7% in the fourth quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 24,188 shares of the company's stock valued at $2,644,000 after purchasing an additional 6,232 shares during the last quarter. Partners Group Holding AG purchased a new stake in ARM in the fourth quarter worth $798,000. Finally, Mirae Asset Global Investments Co. Ltd. raised its stake in shares of ARM by 13.5% in the fourth quarter. Mirae Asset Global Investments Co. Ltd. now owns 417,775 shares of the company's stock valued at $45,667,000 after buying an additional 49,811 shares during the period. 7.53% of the stock is owned by hedge funds and other institutional investors.

ARM News Roundup

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported record fiscal Q1 revenue of $1.29 billion, up 22.4% year over year and ahead of consensus estimates near $1.26 billion. Adjusted EPS of $0.45 also exceeded the $0.40 estimate. Arm shares jump after Q1 revenue, profit beat estimates
• Positive Sentiment: Management issued second-quarter EPS guidance of $0.43–$0.51, above the $0.39 analyst consensus, and forecast revenue above Wall Street expectations. This signals continued momentum despite supply constraints. Arm forecasts quarterly revenue above estimates on AI-driven chip demand
• Positive Sentiment: AI infrastructure remains the key growth driver. Data-center royalty revenue reportedly doubled, while demand for Arm’s AI and AGI CPU roadmap is accelerating as cloud providers develop custom chips. ARM Q1 Earnings Call Highlights AI CPU Demand and Data Center Growth
• Positive Sentiment: Needham reaffirmed its Buy rating and assigned a $255 price target, indicating further potential upside based on the AI-driven growth outlook.
• Neutral Sentiment: The stock’s valuation remains demanding, with a reported P/E ratio above 280 and a high beta, leaving shares sensitive to any guidance or execution disappointment.
• Negative Sentiment: Investors remain concerned that second-quarter royalty growth is expected to be about 13%, reflecting weakness in smartphones and the impact of lower memory prices. These issues could temper the conversion of AI demand into near-term royalty revenue. Memory Prices Hit Arm's Royalties as Stock Falls 4%

About ARM

Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.

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