Rosenblatt Securities Cuts ARM (NASDAQ:ARM) Price Target to $250.00

Key Points

• Rosenblatt Securities lowered ARM’s price target from $270 to $250 while maintaining a “Buy” rating, implying roughly 2.9% upside from the prior close.
• ARM reported better-than-expected quarterly results, with revenue up 22.4% year over year to $1.29 billion and EPS of $0.45 versus the $0.40 consensus estimate. Management also issued above-consensus second-quarter EPS guidance of $0.43–$0.51.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and average target of $285.33, but concerns persist over ARM’s elevated valuation, weaker smartphone demand and near-term royalty-growth risks.

ARM (NASDAQ:ARM - Get Free Report) had its target price lowered by research analysts at Rosenblatt Securities from $270.00 to $250.00 in a research report issued on Friday,Benzinga reports. The firm presently has a "buy" rating on the stock. Rosenblatt Securities' price target would suggest a potential upside of 2.94% from the stock's previous close.

Several other analysts have also recently weighed in on ARM. Deutsche Bank Aktiengesellschaft restated a "hold" rating on shares of ARM in a research report on Thursday, May 7th. Benchmark initiated coverage on ARM in a research report on Thursday, July 16th. They set a "hold" rating on the stock. Weiss Ratings reiterated a "hold (c)" rating on shares of ARM in a report on Friday, July 17th. Mizuho increased their price objective on ARM from $425.00 to $500.00 and gave the company an "outperform" rating in a research report on Monday, June 8th. Finally, Susquehanna raised their price objective on ARM from $300.00 to $320.00 and gave the company a "positive" rating in a report on Tuesday, July 21st. Eighteen investment analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average target price of $285.33.

ARM Trading Up 8.0%

Shares of ARM opened at $242.85 on Friday. The stock has a 50-day moving average price of $329.98 and a 200-day moving average price of $212.71. The company has a market cap of $259.38 billion, a PE ratio of 250.36, a price-to-earnings-growth ratio of 6.99 and a beta of 3.76. ARM has a 12-month low of $100.02 and a 12-month high of $452.70.

ARM (NASDAQ:ARM - Get Free Report) last announced its earnings results on Wednesday, July 29th. The company reported $0.45 earnings per share for the quarter, beating analysts' consensus estimates of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.56%. The business had revenue of $1.29 billion for the quarter, compared to the consensus estimate of $1.26 billion. During the same period last year, the firm posted $0.35 earnings per share. ARM's quarterly revenue was up 22.4% on a year-over-year basis. ARM has set its Q2 2027 guidance at 0.430-0.510 EPS. As a group, analysts predict that ARM will post 1.12 earnings per share for the current year.

Insider Buying and Selling

In related news, insider William Abbey sold 10,887 shares of ARM stock in a transaction on Tuesday, May 19th. The shares were sold at an average price of $224.14, for a total value of $2,440,212.18. Following the transaction, the insider owned 43,353 shares in the company, valued at $9,717,141.42. This trade represents a 20.07% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Richard Roy Grisenthwaite sold 24,339 shares of the company's stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $209.15, for a total transaction of $5,090,501.85. Following the sale, the insider owned 5,543 shares of the company's stock, valued at approximately $1,159,318.45. The trade was a 81.45% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 216,049 shares of company stock worth $52,101,605 over the last 90 days.

Institutional Investors Weigh In On ARM

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Northwestern Mutual Wealth Management Co. grew its position in ARM by 2,623.5% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,671,787 shares of the company's stock worth $182,743,000 after acquiring an additional 1,610,403 shares during the last quarter. Employees Provident Fund Board purchased a new stake in shares of ARM during the fourth quarter valued at approximately $120,241,000. Arrowstreet Capital Limited Partnership grew its holdings in shares of ARM by 1,203.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock worth $142,983,000 after purchasing an additional 872,644 shares during the last quarter. Janus Henderson Group PLC bought a new position in shares of ARM in the first quarter worth approximately $116,112,000. Finally, SG Americas Securities LLC increased its stake in shares of ARM by 265.6% in the first quarter. SG Americas Securities LLC now owns 971,067 shares of the company's stock worth $146,903,000 after buying an additional 705,459 shares during the period. Institutional investors own 7.53% of the company's stock.

More ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Results exceeded expectations: Fiscal Q1 revenue rose 22.4% year over year to $1.29 billion, above the roughly $1.26 billion consensus, while adjusted earnings per share of $0.45 surpassed estimates of $0.40. Arm shares jump after Q1 revenue, profit beat estimates
• Positive Sentiment: AI demand is strengthening: Management highlighted record demand for its AI-focused CPU roadmap, data-center expansion and momentum from cloud customers. Data-center royalty revenue reportedly doubled, while demand for Arm’s next-generation AGI CPU exceeded $2 billion. ARM Q1 Earnings Call Highlights AI CPU Demand and Data Center Growth
• Positive Sentiment: Above-consensus outlook: Arm guided fiscal Q2 earnings per share to $0.43-$0.51, ahead of the $0.39 analyst estimate, and forecast revenue above expectations. Citi maintained a Buy rating and $300 target, while TD Cowen and RBC retained bullish ratings with targets of $350 and $340, respectively. Arm remains key AI infrastructure beneficiary despite softer handset outlook
• Neutral Sentiment: Analyst views are mixed: Needham reaffirmed Buy with a $255 target, but Morgan Stanley kept an Equal Weight rating and lifted its target only to $212, implying concern that expectations may already reflect much of the AI opportunity.
• Negative Sentiment: Smartphone and royalty risks remain: Weak handset demand, memory-price pressure and supply constraints are expected to limit near-term royalty growth, with second-quarter royalty growth reportedly guided at about 13%. Investors are also concerned about execution and Arm’s exceptionally elevated valuation, leaving little room for disappointing results. Memory Prices Hit Arm's Royalties as Stock Falls

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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