HSBC Upgrades Arm Holdings to Buy
HSBC analyst Frank Lee upgraded Arm Holdings (NASDAQ: ARM) from Reduce to Buy with a price target of $205.00 (from $90.00).
“We believe Arm is now firmly in the middle of a transition from being a smartphone dependent semiIP play, into a major AI server CPU beneficiary that remains undervalued by the market.
As highlighted in our previous research, agentic AI is expanding the TAM for server CPUs which should drive server unit growth upside.
All major hyperscalers also have Arm-based server CPUs and are moving to both its v9 architecture as well as Neoverse Compute Subsystems (CSS), doubling its royalty revenue per chip.
We also believe Arm will enter the merchant CPU business which will not only significantly boost its revenue and earnings potential but could also lead to a potential re-rating.”
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