Analyst Vivek Arya from Bank of America Securities reiterated a Buy rating on ARM Holdings PLC ADR (ARM – Research Report) and decreased the price target to $135.00 from $144.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight ARM Holdings PLC’s potential for long-term growth despite current cyclical challenges. Arya notes that while ARM has not provided a FY26 outlook due to uncertainties in global tariffs and deal closures, the company’s core growth drivers remain intact. He anticipates a return to a trendline growth of over 20% annually from FY27, supported by increasing royalty rates from advanced v9 and compute sub-system architectures.
Furthermore, Arya emphasizes ARM’s strong licensing growth, which is expected to continue in the mid-teens percentage year-over-year, driven by the adoption of v9 and CSS across mobile and infrastructure sectors. The shift towards more advanced architectures is also reflected in the increased royalty rates, which are expected to counterbalance any cyclical downturns. Additionally, ARM’s expanding presence in the data center market, with significant opportunities in AI server and networking products, further supports the Buy rating. Despite risks such as unit cyclicality and licensing variability, Arya remains confident in ARM’s strategic positioning and growth prospects.