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Investing.com - Evercore ISI raised its price target on Arm Holdings (NASDAQ:ARM) to $178.00 from $173.00 on Thursday, while maintaining an Outperform rating on the stock. The new target sits well within the current analyst range of $80-$210, as ARM’s stock trades at $154.14, having surged nearly 14% in the past week. According to InvestingPro analysis, the stock appears overvalued at current levels.
The price target increase follows meetings between Evercore ISI and Arm’s executive team, including CEO Rene Haas, CFO Jason Child, and VP of Investor Relations Jeff Kvaal.
Evercore ISI believes there is a "high probability" that Arm will move beyond exploring the possibility of expanding its platform into subsystems, chiplets, and full-end solutions to actually executing this strategy.
The firm notes this strategic shift would transform Arm’s business model to more closely resemble Nvidia’s, positioning Arm as "the CPU-ecosystem of choice" providing processors, libraries, integration expertise, and physical integrated circuits across various markets.
Based on this potential strategic evolution, Evercore ISI calculates Arm could achieve 2030 earnings per share ranging from $5 in a bear case scenario to $13 in a bull case, with a base case of $8.
In other recent news, Arm Holdings reported its latest quarterly earnings, which met market expectations but did not exceed them. Benchmark described the quarter as "very respectable," although it lacked the upside investors have seen since Arm’s public debut in 2023. Arm is also making moves to expand its presence in Southeast Asia, focusing on the growing demand for data centers and artificial intelligence in the region. Analyst firms have been active in revising their views on Arm, with Raymond James raising its price target to $165 and maintaining an Outperform rating, noting strong data center performance despite some weakness in smartphone and IoT units.
Wells Fargo also increased its price target to $175, citing ongoing momentum in AI data centers as a significant factor for future royalty revenue growth. BNP Paribas Exane upgraded Arm from Neutral to Outperform, nearly doubling its price target to $210, highlighting Arm’s potential in the ASIC chip market, which could reach a $200 billion market by 2030. These developments indicate analysts’ positive outlook on Arm’s strategic initiatives and market positioning.
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