Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) Given Consensus Rating of "Moderate Buy" by Analysts

Key Points

• Analysts rate ARM a “Moderate Buy”: Eighteen of 27 brokerages recommend buying the stock, with an average 12-month price target of $305.72.
• CEO Rene Haas expressed increased confidence that Arm’s new AI CPU can generate roughly $2 billion in revenue, citing strong demand; however, supply constraints could hinder shipments and execution.
• ARM recently exceeded quarterly earnings and revenue expectations, but its valuation remains elevated, with a price-to-earnings ratio above 273 and a PEG ratio of 7.24, leaving the stock sensitive to growth disappointments and semiconductor cycles.

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) has been given an average rating of "Moderate Buy" by the twenty-seven brokerages that are currently covering the firm, Marketbeat.com reports. One equities research analyst has rated the stock with a sell rating, seven have assigned a hold rating, eighteen have assigned a buy rating and one has assigned a strong buy rating to the company. The average twelve-month price target among brokerages that have issued a report on the stock in the last year is $305.72.

Several research analysts have weighed in on ARM shares. Weiss Ratings restated a "hold (c)" rating on shares of ARM in a research note on Friday, July 17th. UBS Group lowered their target price on shares of ARM from $360.00 to $320.00 and set a "buy" rating on the stock in a report on Thursday, July 30th. Jefferies Financial Group reissued a "buy" rating and issued a $320.00 target price on shares of ARM in a report on Monday, July 20th. New Street Research upgraded shares of ARM from a "neutral" rating to a "buy" rating and set a $260.00 target price for the company in a research report on Thursday, July 30th. Finally, Morgan Stanley raised their target price on shares of ARM from $202.00 to $212.00 and gave the company an "equal weight" rating in a research note on Thursday, July 30th.

Key ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: CEO Rene Haas said he is increasingly confident Arm can achieve its roughly $2 billion revenue target for its new AGI CPU, citing stronger customer demand and improved visibility than during the company’s July earnings call. Arm CEO says he's more confident its new AI chip can meet a loftier $2B revenue goal
• Positive Sentiment: Haas described demand as “off the charts,” particularly for AI-related infrastructure. Investors view this as evidence that Arm’s CPU designs are benefiting from continued data-center and AI spending. Arm Holdings CEO: Demand is off the charts, the big constraint is going to be supply
• Positive Sentiment: The CEO’s comments are helping reinforce expectations that Arm can capture more value from AI chips and support higher revenue forecasts, making the stock one of the Nasdaq’s stronger performers. Arm's CEO Says the Chip Designer Is Even More Confident in Hitting $2B AI Chip Sales Target
• Neutral Sentiment: Synopsys joined Arm’s Total Design ecosystem to advance physical AI and autonomous-system development. The partnership could expand Arm’s technology ecosystem, but its financial impact is not yet clear. Synopsys Joins Arm Total Design for Physical AI
• Negative Sentiment: Supply—not demand—may be the key near-term limitation. Haas indicated that manufacturers are struggling to build chips quickly enough, raising execution risk if Arm cannot convert strong orders into timely shipments. Arm’s CEO Says Demand Is Off the Charts
• Negative Sentiment: Despite its AI opportunity, analysts note that ARM’s valuation remains stretched, with a high sales multiple and sensitivity to semiconductor cycles. These factors could limit further upside if growth or supply improvements disappoint. ARM Stock Declines 39% in 3 Months

ARM Stock Up 8.6%

Shares of ARM stock opened at $264.90 on Friday. The stock's 50-day simple moving average is $260.62 and its 200-day simple moving average is $246.93. ARM has a 52 week low of $100.02 and a 52 week high of $452.70. The company has a market capitalization of $282.93 billion, a price-to-earnings ratio of 273.10, a PEG ratio of 7.24 and a beta of 3.89.

ARM (NASDAQ:ARM - Get Free Report) last released 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 firm had revenue of $1.29 billion during the quarter, compared to analysts' expectations of $1.26 billion. ARM had a return on equity of 12.24% and a net margin of 20.25%.The firm's revenue was up 22.4% on a year-over-year basis. During the same quarter last year, the business posted $0.35 earnings per share. On average, equities analysts expect that ARM will post 1.15 earnings per share for the current year.

Insider Activity at ARM

In other ARM news, CFO Jason Child sold 10,400 shares of the firm's stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $255.33, for a total transaction of $2,655,432.00. Following the completion of the transaction, the chief financial officer owned 163,832 shares in the company, valued at $41,831,224.56. This trade represents a 5.97% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

Several hedge funds have recently modified their holdings of the company. Hyperion Asset Management Ltd boosted its holdings in ARM by 28.0% during the 4th quarter. Hyperion Asset Management Ltd now owns 1,836,185 shares of the company's stock valued at $200,713,000 after acquiring an additional 401,594 shares during the period. Capital Research Global Investors increased its stake in ARM by 5.1% in the fourth quarter. Capital Research Global Investors now owns 1,805,110 shares of the company's stock worth $197,332,000 after purchasing an additional 86,978 shares during the period. Franklin Resources Inc. increased its stake in ARM by 0.7% in the fourth quarter. Franklin Resources Inc. now owns 1,461,410 shares of the company's stock worth $159,747,000 after purchasing an additional 10,385 shares during the period. Employees Provident Fund Board bought a new stake in shares of ARM during the fourth quarter worth $120,241,000. Finally, SG Americas Securities LLC lifted its position in shares of ARM by 265.6% during the first quarter. SG Americas Securities LLC now owns 971,067 shares of the company's stock worth $146,903,000 after purchasing an additional 705,459 shares during the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

ARM Company Profile

Arm Holdings plc is a semiconductor and software intellectual property company headquartered in Cambridge, England. Rather than manufacturing chips, Arm develops processor architectures and technology designs that it licenses to semiconductor companies, device manufacturers and other technology businesses for use in their own products.

Arm's portfolio includes central processing unit (CPU) architectures and processor cores, graphics processing units (GPUs), systems IP, interconnect technology, security solutions and related software and development tools.

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