Mizuho lifts ARM Holdings stock target to $180, maintains outperform

On Thursday, Mizuho (NYSE:MFG) Securities updated its assessment of Arm Holdings (NASDAQ:ARM), with analyst Vijay Rakesh increasing the price target to $180 from $160, while reiterating an Outperform rating for the company’s stock. According to InvestingPro data, ARM has delivered an impressive 137.41% return over the past year, with the stock currently trading at $173.26. The adjustment follows Arm Holdings ’ financial report for the December quarter, which showed revenues of $983 million, exceeding the consensus estimates of $948 million. The company’s guidance for the March quarter was set at $1.225 billion, closely aligning with the consensus forecast of $1.23 billion. InvestingPro analysis reveals the company maintains an exceptional gross profit margin of 95.98% and operates with minimal debt, as evidenced by a healthy debt-to-equity ratio of just 0.04.

Despite the positive performance, Arm Holdings’ stock experienced a decline in after-hours trading, which analysts believe may be due to investor expectations for a more optimistic guidance, especially in light of recent headlines surrounding advancements in artificial intelligence (AI). Rakesh highlighted several key points from the report, including the steady quarter-over-quarter penetration of the v9 architecture at 25%, and the unchanged target of reaching 60-70% v9 penetration. The report also showed a strong quarterly increase of 23% in both v8 and v9 architectures.

The December quarter saw a significant year-over-year increase of ¾4% in mobile ramps ahead of handset releases, with automotive revenues meeting expectations, and improvements in networking and the Internet of Things (IoT) sectors, the latter showing an uptick in year-over-year performance. Arm Holdings reported having 12 CSS customers split evenly between data centers and mobile, with the annual contract value (ACV) growing 1% quarter-over-quarter to $1.27 billion.

Looking forward to the March quarter, licensing revenues are anticipated to surge by approximately ¾60% year-over-year, although the exact timing may vary. In addition, Arm Holdings modestly upgraded its forecast for Fiscal Year 2025, expecting revenues to climb 22% year-over-year to $3.99 billion. While the company shows strong growth potential, InvestingPro analysis suggests the stock is currently trading above its Fair Value, with a P/E ratio of 227.49x. Subscribers can access 16 additional ProTips and comprehensive valuation metrics through the Pro Research Report. The analyst’s projections for Fiscal Year 2026 anticipate a top-line growth of around ¾20% year-over-year, with Fiscal Year 2027’s PEG ratio estimated at ¾2.1x, which represents a discount compared to peers at 2.6x. Rakesh concluded by emphasizing Arm Holdings’ strong positioning for continued growth, particularly in the CSS Datacenter and AI sectors.

In other recent news, Arm Holdings is witnessing a series of upgrades from major financial firms following its robust earnings report. Jefferies analyst Janardan Menon raised the stock price target from $170 to $195, forecasting a 24% revenue growth for Arm in the fiscal year 2025. Menon anticipates growth dynamics to shift in fiscal years 2026 and 2027 due to the adoption of the v9 architecture and CoreSight System Software (ETR:SOWGn) (CSS).

HSBC analyst Frank Lee also revised the price target for Arm Holdings, increasing it to $115 from the previous target of $105, despite maintaining a Reduce rating on the stock. Arm Holdings reported a Q3 2025 revenue of $983 million, surpassing both HSBC’s and consensus estimates. Licensing revenue was a significant contributor to this beat.

UBS analyst Timothy Arcuri reaffirmed a Buy rating and a $215.00 price target for ARM Holdings (LON:ARM), citing that the company is poised to benefit significantly from the surge in custom ASIC activities among hyperscale companies. Evercore ISI maintained its positive stance on ARM Holdings, raising the price target to $202.00 from the previous $176.00, while JPMorgan analyst Harlan Sur updated the firm’s outlook on Arm Holdings, increasing the price target to $175 from the previous $160. These developments highlight the financial sector’s optimistic outlook on Arm Holdings’ future performance.

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