BofA Securities Raises Arm Holdings Price Target to $155

BofA Securities analyst Vivek Arya raised the price target on Arm Holdings (NASDAQ: ARM) to $155.00 (from $140.00) while maintaining a Neutral rating.

“ARM hosted its ‘Arm Everywhere’ event in San Francisco on Tuesday. As we previewed here, ARM announced its first in-house full merchant silicon – the AGI CPU.

Key highlights: 1) lead customer is Meta, with OpenAI and other neocloud/telco customers engaged; 2) full chiplet expands ARM TAM by ~40x from FY26 (~$2.4bn in royalties) to FY31 (~$100bn in full chiplet); 3) chip revenue outlook is ~$1bn in FY27-28, ~$2bn in FY29, and up to $15bn by FY31; 4) chip business is incremental to existing IP/royalty businesses (including SoftBank project); and 5) most gross profit from chip sales flow straight to EBIT as much of the R&D has already been done.

Combined, ARM sees an EPS power of $9 by FY31, at 20% royalty CAGR, ~$100bn CPU TAM, and ~15% CPU share outlook.

However, we believe ARM’s assumptions are too ambitious and rather see EPS of ~$6.50 by FY31 (see Exhibit 1).

Memory constraints around core consumer market also remains, with smartphone unit outlook now at 10-20% decline for CY26 as capacity shifts further toward AI.

We raise ests/PO to $155 (from $140) on CPU opp’ty, but reiterate Neutral. Our PO is now based on 60x CY27E PE (vs.

57x) in-line with ~2x PEG framework for IP/EDA peers against our ~30% EPS CAGR outlook (at $6.50 EPS).”

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