JPMorgan raises Arm Holdings stock target to $175, maintains Overweight

On Thursday, JPMorgan analyst Harlan Sur updated the firm’s outlook on Arm Holdings (NASDAQ:ARM), increasing the price target to $175 from the previous $160, while reiterating an Overweight rating on the stock. The adjustment reflects a positive view on the company’s financial trajectory and market positioning. According to InvestingPro data, ARM has demonstrated remarkable performance with a 137% return over the past year, though current valuations suggest the stock is trading above its Fair Value.

Sur’s commentary highlighted Arm Holdings’ alignment with the firm’s investment thesis, which anticipates the company to achieve a revenue compound annual growth rate (CAGR) of over 20% and an EPS CAGR of over 40% in the coming years. This growth trajectory is already evident, with InvestingPro data showing a strong 24.56% revenue growth and an impressive 95.98% gross profit margin in the last twelve months. This growth is expected to be driven by increased intellectual property (IP) content, leading to higher royalty rates, gains in market share against proprietary and legacy compute architectures, and deeper penetration into rapidly growing market segments such as artificial intelligence, automotive, and datacenter computing.

The analyst’s optimism is further supported by an expected stronger adoption of the company’s higher dollar value Chip-Set Solutions (CSS) in fiscal year 2026, which is predicted to compensate for a slight deceleration in royalty revenue growth. This has led to the revised price target, indicating confidence in the company’s future performance. The company maintains a strong financial position with a current ratio of 4.52, indicating robust liquidity to support its growth initiatives.

JPMorgan’s analysis suggests that Arm Holdings is on a solid path, with recent results and outlooks aligning with the firm’s forecasts. The company’s strategic position in the high-growth areas of the market is seen as a key driver for its sustained financial success. For deeper insights into ARM’s valuation and growth prospects, investors can access comprehensive analysis and 16 additional ProTips through InvestingPro’s detailed research reports.

The new price target of $175 represents JPMorgan’s updated expectation for Arm Holdings’ share value, taking into account the potential for increased revenue from the company’s advanced solutions. This price target adjustment is a reflection of the firm’s continued endorsement of Arm Holdings’ stock to its clients.

In other recent news, Arm Holdings has been the focus of several analyst reports following its third-quarter fiscal year 2025 earnings announcement. The semiconductor company recorded revenues of $983 million, surpassing expectations, with royalties contributing $580 million and non-royalty revenues, primarily from licensing, amounting to $403 million. Analysts from Bernstein maintained an Underperform rating on the stock, noting steady adoption of Arm’s v9 technology and a decline in Remaining Performance Obligations.

Meanwhile, Barclays (LON:BARC) analyst Tom O’Malley retained an Overweight rating, acknowledging the company’s strong performance in Data Center, Networking, and Internet of Things, while expressing concerns over the stagnation of the v9 mix. Citi analyst Andrew Gardiner increased the price target for Arm Holdings shares to $200, highlighting the company’s momentum in artificial intelligence (AI) sectors. Goldman Sachs also raised the price target to $174, emphasizing the company’s robust growth in Licensing revenues and resilient volume trends in the Internet of Things sector.

Recent developments also include the company’s CEO discussing the financial details of the AI ’Stargate’ project and SoftBank (TYO:9984)’s continued investment in Arm Holdings. These reports and developments provide a snapshot of the current state of Arm Holdings, as viewed by analysts and company executives.

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