Arm's royalty revenue is shifting from smartphones toward data centers, where royalties more than doubled year over year. Shares trade at $223.81 after an October pullback, but a 94x forward multiple means the price already reflects much of that growth; the 24/7 Wall St. target of $238.17 implies 6.4% upside over 12 months, consistent with a hold rating. In fiscal Q1 2027, revenue rose 22.4% to $1.289 billion, beating the $1.267 billion consensus, while GAAP EPS of $0.25 missed the $0.4038 estimate and non-GAAP EPS came in at 45 cents. The bull case is $413.38 and the bear case is $193.72; key risks include GAAP EPS missing estimates in four of the last five quarters and a Qualcomm trial expected in Q4 2026.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
ARMdata centersvaluationsemiconductors
Open a keyword to see other news on the same topic.
Related news
- ARM Stock Is Up 123% This Year. Is It Too Late to Get In?
Arm Holdings (ARM) shares have risen 123% since early January to close at $255 on October 13, but remain 28% below their June 30 close of $355. Arm launched its first silicon product, the Arm AGI CPU developed with lead partner Meta, in March; on the July 29 earnings call, CEO Rene Haas said demand for the chip exceeds $2 billion. On October 13, a Delaware jury found Arm breached a Qualcomm license and awarded $2 in nominal damages, while a judge has yet to rule on whether Qualcomm can stop paying royalties for five years. Analyst ratings stand at 21 Buy, 8 Outperform, 12 Hold, 1 Underperform and 1 Sell, with a mean target of $291, about 14% above the price.
- Arm Just Dropped 19% in a Month. Is It Time to Sell, or Load Up?
Arm Holdings (ARM) shares fell 19.8% over the past month through Tuesday's close, while the Nasdaq 100 slipped 0.5%, though the stock is still up 102% in 2026. A 17% jump on Sept. 21, driven by hopes for Meta's Muse AI agent, reversed after reports that SoftBank's Arm stake backs a $25 billion loan facility and after AI safety fears following a breach. Further declines in October came amid chip-sector selloffs, and on Oct. 13 a Delaware jury found Arm breached its license with Qualcomm, awarding just $2 in total damages. The bigger issue is that Judge Maryellen Noreika has yet to rule on whether Qualcomm can stop paying royalties for five years. Arm reports fiscal second-quarter results on Nov. 4 against revenue guidance of $1.38 billion.
- Arm’s Ready-Made Blueprints: The Blueprint Attack on Marvell’s Challenger Crown
Arm reported fiscal first-quarter revenue of $1.29 billion, up 22%, and says AGI CPU demand now exceeds $2 billion, though locked-in supply covers only the initial $1 billion. Marvell posted record revenue of $2.739 billion, up 37%, with data center sales at 79% of the total. The article argues Arm's ready-made compute subsystems and AGI CPU could let hyperscalers skip some custom design work that Marvell sells, and Arm may accept thinner margins, with first-generation AGI CPU gross margin expected in the high 30% range, maybe low 40s, versus Marvell's 58.9% non-GAAP gross margin. Marvell's non-GAAP operating margin rose to 36.6% from 34.8%, while Arm trades at about 248 times earnings. Over the past month, Arm fell 36.94% and Marvell lost 14.8%.
- Not Intel. Not AMD. This Is the CPU Stock I'd Buy for the AI Agent Era.
The article argues that agentic AI is driving strong demand for server CPUs, with a third-party estimate projecting the agentic AI market to grow at a 40% CAGR over seven years to $206 billion in revenue in 2033. The CPU-to-GPU ratio in agentic AI servers is shifting from 1:4 to 1:2 or 1:1, implying a 2-4x jump in server CPU demand. AMD's data center revenue rose 107% year over year in Q2 2026, while Intel's data center and AI (DCAI) business grew 59% to $6.3 billion. Arm-based server CPUs reportedly hold about 20% share, and IDC noted Arm-based server platform revenue of $53 billion in Q1 2026 versus $34.6 billion for x86. The author sees Arm as better positioned, citing 30% to 60% higher energy efficiency and Arm's expectation of over $2 billion in server CPU revenue over the next couple of fiscal years.
- Advanced Micro Devices vs. Arm: Which Tech Stock Is a Better Buy in 2026?
The article compares Advanced Micro Devices, which designs and sells CPUs, GPUs and AI accelerators directly, with Arm, which licenses its chip architecture and earns royalties. In the fiscal year ended December 27, 2025, AMD reported revenue of nearly $34.6 billion, up about 34.3%, with net income of about $4.3 billion and free cash flow of nearly $6.7 billion. Arm reported $4.9 billion in revenue for the fiscal year ended March 31, 2026, up 22.8%, with net income of about $904 million and free cash flow of roughly $979 million. Stock-based compensation was about 21.2% of AMD’s operating cash flow and roughly 69% of Arm’s. The article also cites risks: AMD faces competition from Intel and Nvidia, depends on TSMC and faces export restrictions to China, while Arm depends on a smartphone market nearing saturation and faces competition from Qualcomm.
- Up 3,700%, Should You Buy Sandisk Right Now?
Sandisk (SNDK) stock has risen 3,700% since its formal separation from Western Digital in February 2025. The gain was driven by surging demand for flash storage from AI data centers, inclusion in the Nasdaq-100 and S&P 500, and net income of over $11 billion in fiscal 2026, compared with a $1.6 billion loss the year before. With a P/E ratio of 19 and a forward P/E of 6.3, the article notes that memory and storage stocks have historically faced sharp sell-offs once booms end, so investors should approach the stock with caution. The author says the stock is more likely to pull back than rise over time, though it could keep climbing if revenue forecasts prove accurate.
Related markets
Latest news
- Trump's executive order targets mortgage insurance, refinance costs. What it means for borrowers
President Donald Trump signed an executive order, “Decreasing Housing Costs for the American People,” to lower mortgage costs as rising interest rates and inflation weigh on homeownership. It directs federal agencies to proactively cancel mortgage insurance on eligible future loans once home equity reaches a set threshold, and to make a refinancing cost-reduction program permanent. Freddie Mac data show 30-year fixed-rate mortgages at 7.32% as of Oct. 23, while refinance demand was down 59% in mid-October from a year earlier. Keith Gumbinger of HSH said it is difficult to gauge the consumer impact without more details, and that the refinancing change is not necessarily a game-changer given that home prices and mortgage rates dictate costs. The order comes less than two weeks before the Nov. 3 midterm elections.
- CoreWeave Heads for Third Weekly Loss, Weighing on Stocks and Bitcoin Over AI Financing Fears
Bitcoin traded near $81,400 on Friday, little changed on the day after a 3.2% drop Thursday as weakness in equities over concerns about AI infrastructure financing weighed on the market. CoreWeave (CRWV) plunged 10% Thursday to a 52-week low of $53.50, is down roughly 37% in October and is heading for a third straight weekly loss; Bernstein cut its price target to $51 from $74 and Morgan Stanley to $70 from $99. The Nasdaq Composite fell 2.6% Thursday to 26,009, its worst day since June, while Nvidia CEO Jensen Huang said a “scarcity of capital” is hampering neocloud buildouts. U.S. spot bitcoin ETFs recorded net outflows of $635 million Thursday, the largest one-day withdrawal since late June. Crypto liquidations totaled $336 million over 24 hours, including $281 million in long positions.
- Why Comfort Systems Plunged Today
Comfort Systems (FIX) fell as much as 13.2% on Friday before trimming its decline to 8.9% by 3:10 p.m. EDT, despite beating revenue and earnings estimates for the quarter. Revenue rose 53.7% and EPS grew 68.6% to $13.91, while backlog climbed to $17.8 billion from $14.1 billion three months earlier. The article attributes the sell-off mainly to the announced year-end retirement of Bill George, a founder and longtime CFO, along with a "sell the news" reaction seen across AI-linked stocks this earnings season. Shares are about 38% below their June all-time high and trade at 19.4 times average 2027 analyst earnings estimates.
- Intel Stock Has Moved an Average of 16% the Day After Its Last 3 Reports. Should You Buy Before the Next One?
Intel reports third-quarter results after the close on Oct. 29, and its stock has moved an average of about 16% in the session after its last three reports: down 17% after January, up 24% after April, and down 8% after July. The company beat its own forecasts each time, yet shares fell twice because management's outlook for the coming months carried more weight. The third-quarter revenue midpoint of $16.3 billion is only about 1% above the second quarter, a sharp slowdown, so the fourth-quarter forecast is seen as the key number to watch. At around 44 times expected 2027 earnings, the author argues the share price already reflects a return to growth, and says he would not buy the stock before the report.
- SpaceX Filing Gives Elon Musk the Final Word on Tesla Merger He Says He’s Staying Out Of
SpaceX stated in an SEC filing that any merger with Tesla must be approved by its controlling shareholder, Elon Musk, who holds roughly 85% of voting power. Musk recused himself from both special committees but publicly endorsed the deal, which Reuters reported created a "mess" for the independent process. Both companies formed special committees on October 20 to evaluate a proposed deal that analysts estimate could create a combined entity worth around $3.5 trillion. REX Financial estimates Musk would hold roughly 57% of combined voting power. Tesla shareholders must clear a 50%-of-all-outstanding-shares threshold, with a vote expected at or near the December 3 annual meeting.
- SpaceX Filing Gives Elon Musk the Final Word on Tesla Merger He Says He’s Staying Out Of
SpaceX stated in an SEC filing that any merger with Tesla must be approved by its controlling shareholder, Elon Musk, who holds roughly 85% of voting power. Musk recused himself from both special committees but publicly endorsed the deal, which Reuters reported created a "mess" for the independent process. Both companies formed special committees on October 20 to evaluate a proposed deal that analysts estimate could create a combined entity worth around $3.5 trillion. REX Financial estimates Musk would hold roughly 57% of combined voting power. Tesla shareholders must clear a 50%-of-all-outstanding-shares threshold, with a vote expected at or near the December 3 annual meeting.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.