BofA Securities Raises Arm Holdings Price Target to $140
BofA Securities analyst Vivek Arya raised the price target on Arm Holdings (NASDAQ: ARM) to $140.00 (from $135.00) while maintaining a Neutral rating.
“We now see potential for greater ARM share gain toward 20-25%+ by CY30E, up from our prior 15-20% outlook… ARM is expected to unveil its upcoming in-house designed merchant CPU, a deviation from its historical IP-licensing and royalty-based model.
With full chiplets, ARM’s SAM could be 30x ($50-100/chip for IP vs. $1.5-2k/chip for full silicon), and addressable OpM could be 20x (40-45% OpM for IP vs. 25-30% OpM for chips).
At a modest ~3-5% CPU share, ARM could expand its CY28-30E EPS by 10-20%, though a potential future removal of current ~$800mn/yr SoftBank licensing sales (as chips R&D may be one-time vs.
IP Licensing recurring) could offset most of the n-t benefits (need ~$1.2bn/yr in chip sales).”
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