TD Cowen Has Lowered Expectations for ARM (NASDAQ:ARM) Stock Price

Key Points

• TD Cowen cut ARM’s price target from $475 to $350 but maintained a “Buy” rating, implying approximately 46.7% upside from the prior close.
• Analyst sentiment remains broadly positive: 18 analysts rate ARM a Buy, seven a Hold and one a Sell, with a consensus price target of $281.92. Wells Fargo also lowered its target to $280, while other firms issued mixed ratings and targets.
• ARM exceeded quarterly expectations with $1.29 billion in revenue and $0.45 adjusted EPS, driven by AI and data-center demand. However, its valuation remains very high, and slower near-term royalty growth tied to smartphones and memory prices could pressure the stock.

ARM (NASDAQ:ARM - Get Free Report) had its price objective cut by equities researchers at TD Cowen from $475.00 to $350.00 in a research note issued on Thursday,Benzinga reports. The firm currently has a "buy" rating on the stock. TD Cowen's price objective points to a potential upside of 46.66% from the company's previous close.

Several other equities research analysts have also recently commented on the company. Wells Fargo & Company cut their price target on ARM from $350.00 to $280.00 and set an "overweight" rating for the company in a report on Thursday. UBS Group reissued a "buy" rating on shares of ARM in a research note on Thursday. Bank of America reaffirmed a "neutral" rating on shares of ARM in a research note on Thursday. The Goldman Sachs Group lifted their price target on ARM from $125.00 to $150.00 and gave the stock a "sell" rating in a report on Thursday, May 7th. Finally, HSBC cut shares of ARM from a "buy" rating to a "hold" rating and boosted their price target for the company from $255.00 to $315.00 in a research report on Tuesday, July 14th. Eighteen research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, ARM presently has an average rating of "Moderate Buy" and a consensus price target of $281.92.

ARM Price Performance

ARM traded up $13.75 on Thursday, reaching $238.64. 7,216,496 shares of the company's stock were exchanged, compared to its average volume of 8,564,271. The stock has a market cap of $254.89 billion, a PE ratio of 278.52, a P/E/G ratio of 7.61 and a beta of 3.76. ARM has a twelve month low of $100.02 and a twelve month high of $452.70. The stock's fifty day moving average price is $331.09 and its 200-day moving average price is $211.79.

ARM (NASDAQ:ARM - Get Free Report) last released its quarterly earnings data on Thursday, July 30th. The company reported $0.45 EPS for the quarter, beating 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 company had revenue of $1.29 billion during the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter in the prior year, the firm earned $0.35 EPS. ARM's quarterly revenue was up 22.4% on a year-over-year basis. As a group, research analysts predict that ARM will post 1.12 earnings per share for the current fiscal year.

Insiders Place Their Bets

In related news, insider William Abbey sold 6,566 shares of the business's stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $402.72, for a total value of $2,644,259.52. Following the sale, the insider directly owned 20,563 shares in the company, valued at approximately $8,281,131.36. The trade was a 24.20% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Charlotte Claire Eaton sold 7,805 shares of the company's stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $290.01, for a total transaction of $2,263,528.05. Following the completion of the transaction, the insider directly owned 5,000 shares in the company, valued at $1,450,050. The trade was a 60.95% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 216,049 shares of company stock worth $52,101,605 in the last three months.

Institutional Trading of ARM

Several institutional investors have recently added to or reduced their stakes in the stock. Morgan Stanley boosted its position in shares of ARM by 1.2% during the fourth quarter. Morgan Stanley now owns 3,783,006 shares of the company's stock worth $413,521,000 after buying an additional 45,314 shares during the period. Invesco Ltd. grew its position in ARM by 36.9% in the 4th quarter. Invesco Ltd. now owns 2,426,850 shares of the company's stock valued at $265,279,000 after acquiring an additional 654,727 shares in the last quarter. Coatue Management LLC increased its stake in ARM by 1.8% during the fourth quarter. Coatue Management LLC now owns 2,300,000 shares of the company's stock worth $251,413,000 after purchasing an additional 40,174 shares during the period. Wellington Management Group LLP lifted its position in shares of ARM by 41.6% during the fourth quarter. Wellington Management Group LLP now owns 2,149,159 shares of the company's stock worth $234,925,000 after purchasing an additional 631,576 shares in the last quarter. Finally, Schroder Investment Management Group boosted its stake in shares of ARM by 11.0% in the fourth quarter. Schroder Investment Management Group now owns 1,891,310 shares of the company's stock valued at $206,739,000 after purchasing an additional 187,035 shares during the period. Institutional investors and hedge funds own 7.53% of the company's stock.

More 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.

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