Barclays Raises Arm Holdings Price Target to $200

Barclays analyst Tom O’Malley raised the price target on Arm Holdings (NASDAQ: ARM) to $200.00 (from $165.00) while maintaining an Overweight rating.

“The Arm Everywhere event made it clear that CPUs play a very important role in agentic AI (napkin math + Jensenomics gets you closer to 1 CPU per 1.4 GPU from something closer to 1 to 2).

ARM’s solution is the AGI CPU, which maximizes performance/watt and plays to ARM’s strength in energy efficiency. Guides to $1B of CPU revenue in FY28 but total revenue of $7.8B (vs.

Street $7.25B) implying Street a bit too heavy on Licensing/Royalty today but in the end a material raise.

We feel comfortable with the $1B as using 30M cores per GW (ARM expects to reach 120M eventually), 19 incremental GW in 2027 (see here), 136 cores in the AGI CPU, and assuming a $1,500 ASP (mgmt ests. ~$1-2K) implies a ~$6.3B AGI CPU opportunity in 2027 – using ARM’s current share of Server units (~15%) implies nearly $1B of revenue.

We would expect more customer announcements / product launches (e.g., XPUs) to drive upside through the end of the decade as well.

We think this is an interesting product that nicely suits the company’s core strength in low power at a time when software hurdles in porting are moving materially lower with LLMs.

We raise our PT to $200 from $165 and maintain our OW rating.”

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