Bernstein Initiates Arm Holdings at Outperform, $300 Price Target

Bernstein SocGen Group analyst David Dai initiated coverage of Arm Holdings (NASDAQ: ARM) with an Outperform rating and a $300.00 price target.

“Arm is the structural beneficiary of the renaissance of CPUs for agentic AI.

Compared to Gen AI 1.0, Agentic AI involves heavily autonomous task orchestration and execution, which can only be done by CPUs.

While traditional AI data centers require ~30 million CPU cores / GW of compute, Agentic AI data centers require ~120 million CPU cores / GW — a 4x structural increase.

The ratio of GPU:CPU is shifting from the current 8:1 to 2:1 / 1:1, with server CPU TAM quadrupling to $137bn by 2030. Arm stands out in server CPUs given its unparalleled power efficiency.

In addition, Arm is shifting from just IP provider to CPU maker, aiming to capture $15bn revenue by CY2030.

We forecast Arm’s revenue to grow more than five-fold to $26 Bn by 2030, with EPS expanding similarly (~5.5x) to $9.83, supported by the growing adoption of Arm CPUs in AI data centers, its own Arm CPU revenue, and the rising royalty driven by the higher value Arm provides to clients through the rapid evolution of CPUs.

With 90x P/E on Q5-8 EPS of $3.33, we rate Arm Outperform with PT= $300.00.

In the bull case, we can see Arm being valued at 40x on $9.8 2030 (FY31) EPS, implying a valuation of $390.”

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