RBC Capital Raises Arm Holdings Price Target to $260
RBC Capital analyst Srini Pajjuri raised the price target on Arm Holdings (NASDAQ: ARM) to $260.00 (from $175.00) while maintaining an Outperform rating.
“ARM’s results and outlook were a bit better. DC royalties more than doubled and were partially offset by weaker Android volumes.
Management now has line of sight into $2b AGI CPU revenue in the next two years but is maintaining its prior guidance for $1b due to supply constraints.
Licensing is sustaining >20% growth for now and management believes Softbank contribution is durable.
Looking ahead, we see room for meaningful upside potential as supply situation eases and view ARM as an outsized beneficiary from AgenticAI-driven CPU growth.
In other markets, CSS transition remains a tailwind in smartphones while PhysicalAI is in very early stages.
We believe premium valuation is justified given 20%+ royalty growth, data center share gains, and large SAM.”
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