Morgan Stanley Increases ARM (NASDAQ:ARM) Price Target to $212.00

Key Points

• Morgan Stanley raised ARM’s price target to $212 from $202 but maintained an “equal weight” rating, implying 10.75% downside from the reported $237.52 share price. Analysts overall remain more positive, with a “Moderate Buy” consensus and an average target of $287.83.
• ARM reported quarterly revenue of $1.29 billion and EPS of $0.45, beating estimates, while revenue grew 22.4% year over year. Management’s upbeat outlook is being supported by strong AI and data-center demand.
• Despite the growth outlook, ARM’s valuation remains elevated, with a P/E ratio above 280, and investors face risks from smartphone weakness and slower expected royalty growth. Insiders sold approximately $52.1 million of stock over the past three months.

ARM (NASDAQ:ARM - Get Free Report) had its target price increased by research analysts at Morgan Stanley from $202.00 to $212.00 in a research report issued on Thursday,Benzinga reports. The brokerage currently has an "equal weight" rating on the stock. Morgan Stanley's price target suggests a potential downside of 10.75% from the company's current price.

Several other analysts have also recently weighed in on ARM. Jefferies Financial Group restated a "buy" rating and set a $320.00 price target on shares of ARM in a report on Monday, July 20th. Wells Fargo & Company reduced their price objective on shares of ARM from $350.00 to $280.00 and set an "overweight" rating on the stock in a research report on Thursday. Benchmark began coverage on shares of ARM in a research note on Thursday, July 16th. They set a "hold" rating for the company. Raymond James Financial reissued an "outperform" rating on shares of ARM in a research note on Thursday, May 7th. Finally, Deutsche Bank Aktiengesellschaft restated a "hold" rating on shares of ARM in a report on Thursday, May 7th. Eighteen research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $287.83.

ARM Stock Up 5.6%

ARM stock traded up $12.63 during mid-day trading on Thursday, hitting $237.52. 9,125,848 shares of the company's stock traded hands, compared to its average volume of 8,579,918. The company has a market cap of $253.69 billion, a PE ratio of 283.14, a price-to-earnings-growth ratio of 7.61 and a beta of 3.76. The firm has a 50 day moving average price of $331.09 and a 200 day moving average price of $211.79. ARM has a one year low of $100.02 and a one year high of $452.70.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The company reported $0.45 earnings per share for the quarter, topping analysts' consensus estimates of $0.40 by $0.05. ARM had a net margin of 18.37% and a return on equity of 12.43%. The business had revenue of $1.29 billion during the quarter, compared to analysts' expectations of $1.26 billion. During the same period in the previous year, the company earned $0.35 earnings per share. ARM's revenue for the quarter was up 22.4% on a year-over-year basis. On average, analysts expect that ARM will post 1.12 earnings per share for the current fiscal year.

Insider Transactions at ARM

In related news, CAO Laura Kathleen Bartels sold 11,306 shares of the firm's stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $392.70, for a total value of $4,439,866.20. Following the completion of the transaction, the chief accounting officer directly owned 12,135 shares of the company's stock, valued at approximately $4,765,414.50. This trade represents a 48.23% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider William Abbey sold 6,566 shares of the company's stock in a transaction on Monday, June 1st. The stock was sold at an average price of $402.72, for a total value of $2,644,259.52. Following the sale, the insider owned 20,563 shares of the company's stock, valued at $8,281,131.36. The trade was a 24.20% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 216,049 shares of company stock valued at $52,101,605 in the last three months.

Hedge Funds Weigh In On ARM

A number of large investors have recently modified their holdings of the company. Syntax Research Inc. bought a new position in ARM in the 1st quarter worth $30,000. Evelyn Partners Investment Management Services Ltd purchased a new position in ARM in the 1st quarter worth about $30,000. Allied Private Wealth LLC purchased a new stake in shares of ARM during the 2nd quarter worth $71,000. FWL Investment Management LLC acquired a new position in shares of ARM in the 2nd quarter valued at $34,000. Finally, Cassaday & Co Wealth Management LLC purchased a new stake in ARM during the first quarter worth $40,000. 7.53% of the stock is currently owned by institutional investors.

Key ARM News

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.