ARM (NASDAQ:ARM) Trading Up 3.3% - Time to Buy?

Key Points

• ARM shares rose 3.3% on Thursday to $228.50, with trading volume running above average as investors reacted to a stronger AI-related growth narrative.
• Recent coverage suggests Arm is expanding its AI ambitions, including reports that Arm and SoftBank tried to buy Cerebras Systems and that Arm is gaining server share at Intel’s expense.
• Analyst sentiment remains constructive overall, with Wells Fargo and Mizuho raising price targets to $255, even as some insiders sold shares and the stock still carries a consensus "Moderate Buy" rating.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price was up 3.3% on Thursday . The stock traded as high as $228.68 and last traded at $228.50. Approximately 8,353,041 shares changed hands during trading, an increase of 7% from the average daily volume of 7,788,885 shares. The stock had previously closed at $221.21.

ARM News Summary

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Reports that Arm and SoftBank tried to acquire Cerebras Systems suggest Arm is actively looking to expand its AI chip ambitions beyond its core licensing business, which investors may view as a sign of longer-term growth optionality. Article: Arm, SoftBank Tried To Buy Cerebras Before $34 Billion IPO
• Positive Sentiment: A UBS-linked report showing AMD and ARM continuing to gain server share at Intel’s expense reinforces the idea that Arm is benefiting from rising demand for alternative chip architectures in AI and data centers. Article: New report shows AMD and ARM continue server share gains at Intel’s expense
• Positive Sentiment: Coverage highlighting Arm’s AI chip ambitions and growing relevance in AI-focused computing is helping keep sentiment constructive around the stock. Article: Arm’s Cerebras Bid Sheds Light On AI Chip Expansion Plans
• Neutral Sentiment: Arm CEO comments about CPUs scaling to extreme core counts in an AI-driven future support the long-term AI narrative, but this is more strategic commentary than a near-term catalyst. Article: Arm CEO predicts CPUs will scale to extreme core counts in AI-driven future
• Negative Sentiment: Insider Spencer Collins sold 51,961 shares, which can weigh on sentiment because insider selling may raise questions about valuation or near-term upside. Article: ARM NASDAQ: ARM Insider Spencer Collins Sells 51,961 Shares

Analysts Set New Price Targets

Several equities analysts have weighed in on ARM shares. Wells Fargo & Company raised their target price on shares of ARM from $220.00 to $255.00 and gave the company an "overweight" rating in a report on Thursday, May 7th. Evercore dropped their target price on shares of ARM from $215.00 to $170.00 and set an "outperform" rating for the company in a report on Thursday, February 5th. Deutsche Bank Aktiengesellschaft restated a "hold" rating on shares of ARM in a report on Thursday, May 7th. Mizuho raised their target price on shares of ARM from $230.00 to $255.00 and gave the company an "outperform" rating in a report on Wednesday, May 6th. Finally, Benchmark restated a "hold" rating on shares of ARM in a report on Thursday, February 5th. Nineteen research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $199.61.

ARM Stock Up 3.3%

The firm has a market capitalization of $241.41 billion, a PE ratio of 272.02, a P/E/G ratio of 7.17 and a beta of 3.40. The business's fifty day moving average price is $161.08 and its 200 day moving average price is $139.70.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings results on Wednesday, April 1st. The company reported $0.60 EPS for the quarter. The business had revenue of $1.49 billion during the quarter. ARM had a net margin of 18.37% and a return on equity of 12.43%. As a group, sell-side analysts forecast that ARM Holdings PLC Sponsored ADR will post 1.18 earnings per share for the current fiscal year.

Insider Transactions at ARM

In other news, CFO Jason Child sold 21,280 shares of ARM stock in a transaction dated Wednesday, April 22nd. The shares were sold at an average price of $180.00, for a total transaction of $3,830,400.00. Following the completion of the sale, the chief financial officer directly owned 153,426 shares in the company, valued at $27,616,680. The trade was a 12.18% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Spencer Collins sold 51,961 shares of ARM stock in a transaction dated Monday, May 11th. The stock was sold at an average price of $211.73, for a total transaction of $11,001,702.53. Following the sale, the insider owned 51,125 shares of the company's stock, valued at approximately $10,824,696.25. This trade represents a 50.41% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 135,673 shares of company stock worth $24,616,433 over the last ninety days.

Institutional Investors Weigh In On ARM

A number of institutional investors have recently bought and sold shares of ARM. Capital Research Global Investors purchased a new stake in ARM in the third quarter valued at approximately $243,098,000. Northwestern Mutual Wealth Management Co. grew its holdings in ARM by 2,623.5% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,671,787 shares of the company's stock valued at $182,743,000 after purchasing an additional 1,610,403 shares during the period. Hyperion Asset Management Ltd purchased a new stake in ARM in the third quarter valued at approximately $202,980,000. Employees Provident Fund Board purchased a new stake in ARM in the fourth quarter valued at approximately $120,241,000. Finally, Arrowstreet Capital Limited Partnership grew its holdings in ARM by 1,203.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock valued at $142,983,000 after purchasing an additional 872,644 shares during the period. 7.53% of the stock is currently owned by hedge funds and other institutional investors.

ARM Company Profile

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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