UBS Raises Arm Holdings Price Target to $175

UBS analyst Timothy Arcuri raised the price target on Arm Holdings (NASDAQ: ARM) to $175.00 (from $170.00) while maintaining a Buy rating.

“At the ARM Everywhere event, the company introduced its new ARM-based CPU scaling to 136 cores and delivering up to ~2x better performance per watt versus x86.

While its absolute core count trails leading x86 alternatives, ARM believes its CPU to offer a compelling alternative for both agentic AI workloads and non-NVDA XPU server head nodes.

With orders from 8 customers already – led by META and OpenAI – traction is ahead of where we expected.

Based on the orders and visibility, ARM outlined a CPU ramp that does not strike us as particularly heroic and likely biased higher over time (~$1B CPU revenues by FY28 and ~$15B by FY31), implying ~15% market share when ramped.

From a financial perspective, ARM outlined a path to Revs/EPS of ~$7.8B/$3+ in FY28 and ~$25B/$9+ in FY31, which sits meaningfully above our prior estimates (and above our FY30 framework of ~$16B/$6).

We expect valuation to remain the main near-term pushback, with after-hours price still screening expensive at ~50x FY28 EPS; however, on FY31 EPS the multiple compresses to ~16x, which we think becomes increasingly compelling – particularly if incremental upside from potential SoftBank/OpenAI XPU-related royalties materializes and drives further estimate revisions.

Net, we are increasing our estimates and PT from $170 to $175, and reiterate our Buy rating.”

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