Arm Q1 report to test valuation expansion, says Deutsche Bank

Deutsche Bank analyst Ross Seymore says Arm‘s valuation expansion will be tested with its fiscal Q1 report on July 31. The firm expects the company to report an in-line quarter and guidance, driven by continued architecture penetration in handsets, share gains in data center and automotive, license expansion, and artificial intelligence-related licensing momentum. The stock is up 60% in the last three months, which reflects the high-quality nature of Arm’s business model and investor willingness to pay a higher multiple “for that goodness,” the analyst tells investors in a research note. Deutsche looks forward to revisiting its valuation methodology when the company reports. It keeps a Hold rating on the shares with an $82 price target.