RBC Capital Raises Arm Holdings Price Target to $175
RBC Capital analyst Srini Pajjuri raised the price target on Arm Holdings (NASDAQ: ARM) to $175.00 (from $130.00) while maintaining an Outperform rating.
“ARM announced its much-anticipated full-chip strategy which the management believes will complement its IP business.
Management is targeting 15% share of $100b TAM from chips with initial $1b revenue during FY27/28.
The strategy offers significant revenue growth and earnings potential longer-term ($9+ EPS by FY31) but comes with gross margin dilution (40%-50% for chips vs 98%+ for IP) and channel conflict issues.
While the business model debate could continue, we expect the stock to largely trade on NT fundamentals, which remain solid on AgenticAI inflection, DC share gains, and CSS/v9 ASP tailwinds.
We raise PT and reiterate Outperform.”
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