ARM (NASDAQ:ARM) Trading Up 16.2% - Still a Buy?

Key Points

• ARM shares jumped 16.2% in mid-day trading, hitting an intraday high of $298.70 on volume far above average, reflecting strong investor demand for the stock.
• Recent analyst commentary has been notably bullish, including Bernstein’s Outperform rating with a $300 target and Jefferies’ positive view on Nvidia’s Arm-based Vera CPU business supporting ARM’s growth story.
• Despite the rally, ARM still faces risks from possible U.S. antitrust scrutiny, while insider selling and a very rich valuation may keep some investors cautious.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s share price was up 16.2% during mid-day trading on Thursday . The stock traded as high as $298.70 and last traded at $298.23. Approximately 21,535,870 shares were traded during trading, an increase of 166% from the average daily volume of 8,108,127 shares. The stock had previously closed at $256.73.

Key Headlines Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Jefferies said Nvidia’s bullish comments on its Arm-based Vera CPU business support ARM’s growth narrative. Article: Nvidia CPU comments read positively for this chip stock: analyst
• Positive Sentiment: Bernstein initiated coverage with an Outperform rating and a $300 target, highlighting ARM’s role in the CPU and AI chip ecosystem. Article: Arm Holdings (ARM) Hits All-Time High on Bernstein Upbeat Rating
• Positive Sentiment: Several market reports said ARM is benefiting from renewed enthusiasm for AI-linked semiconductor names and custom silicon demand. Article: Why Arm Holdings Stock Popped Today
• Neutral Sentiment: Multiple insider sales were disclosed, including transactions by the CFO and other executives, but several were tied to pre-arranged 10b5-1 plans or tax withholding obligations, which makes them less concerning than discretionary selling.
• Negative Sentiment: Reports of a possible U.S. antitrust probe remain a risk and could weigh on sentiment if regulators intensify scrutiny of ARM’s licensing model. Article: Arm Falls on Reported US Antitrust Probe

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on the stock. TD Cowen boosted their price target on ARM from $165.00 to $265.00 and gave the company a "buy" rating in a report on Thursday, May 7th. New Street Research upgraded shares of ARM from a "neutral" rating to a "buy" rating in a research note on Thursday, February 5th. Morgan Stanley restated an "equal weight" rating and issued a $150.00 price target (up from $135.00) on shares of ARM in a research note on Tuesday, April 7th. The Goldman Sachs Group raised their price objective on shares of ARM from $125.00 to $150.00 and gave the stock a "sell" rating in a research report on Thursday, May 7th. Finally, KeyCorp reissued an "overweight" rating on shares of ARM in a research report on Thursday, February 5th. Twenty investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $208.79.

ARM Stock Up 16.2%

The stock has a market capitalization of $315.08 billion, a price-to-earnings ratio of 355.04, a price-to-earnings-growth ratio of 8.10 and a beta of 3.40. The stock has a 50 day moving average price of $171.77 and a 200 day moving average price of $141.63.

ARM (NASDAQ:ARM - Get Free Report) last posted its quarterly earnings results on Wednesday, April 1st. The company reported $0.60 earnings per share (EPS) for the quarter. ARM had a return on equity of 12.43% and a net margin of 18.37%.The firm had revenue of $1.49 billion for the quarter. Sell-side analysts forecast that ARM Holdings PLC Sponsored ADR will post 1.12 earnings per share for the current fiscal year.

Insider Activity at ARM

In other ARM news, insider William Abbey sold 10,887 shares of the business's stock in a transaction on Tuesday, May 19th. The shares were sold at an average price of $224.14, for a total transaction of $2,440,212.18. Following the completion of the sale, the insider owned 43,353 shares in the company, valued at approximately $9,717,141.42. The trade was a 20.07% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CFO Jason Child sold 31,920 shares of ARM stock in a transaction dated Wednesday, May 20th. The shares were sold at an average price of $226.54, for a total transaction of $7,231,156.80. Following the transaction, the chief financial officer owned 174,232 shares of the company's stock, valued at $39,470,517.28. This represents a 15.48% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 264,506 shares of company stock valued at $53,198,992 over the last three months.

Institutional Investors Weigh In On ARM

Several institutional investors have recently bought and sold shares of the stock. Amundi boosted its position in ARM by 24.8% during the first quarter. Amundi now owns 11,804 shares of the company's stock worth $1,153,000 after purchasing an additional 2,345 shares during the period. Empowered Funds LLC boosted its stake in ARM by 28.8% in the 1st quarter. Empowered Funds LLC now owns 4,887 shares of the company's stock worth $522,000 after purchasing an additional 1,094 shares during the period. Schnieders Capital Management LLC. boosted its stake in ARM by 9.0% in the 2nd quarter. Schnieders Capital Management LLC. now owns 2,430 shares of the company's stock worth $393,000 after purchasing an additional 200 shares during the period. Bank of Nova Scotia bought a new stake in ARM during the 2nd quarter worth approximately $556,000. Finally, State Street Corp increased its holdings in ARM by 14.7% during the 2nd quarter. State Street Corp now owns 441,445 shares of the company's stock worth $71,399,000 after acquiring an additional 56,656 shares during the period. Institutional investors own 7.53% of the company's stock.

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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