BofA Securities Downgrades Arm Holdings to Neutral
BofA Securities analyst Vivek Arya downgraded Arm Holdings (NASDAQ: ARM) from Buy to Neutral with a price target of $120.00.
“For ARM, we flag revenue slowdown (both royalties/licensing) and increasing SoftBank reliance into CY26.
Particularly, global smartphone units could decline LSD YoY (vs. up LSD in CY25) on increased memory costs and supply constraints, a headwind to ARM Client (>50% of Royalty sales).
Meanwhile, CSS adoption (or content expansion) is still limited and in early stages.
For Licensing, we flag FY26 revenue could actually decline -5% YoY (with the most recent FQ2 sales missing by $70mn) if we exclude SoftBank which now represents 25-30% of total Licensing and could raise circular financing concerns.
Longer-term though, we continue to like ARM’s potential in data center, in both server content ($ per core, more cores, share gains) and new silicon/chiplet opps.”
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