BofA Securities Lowers Arm Holdings Price Target to $260

BofA Securities analyst Vivek Arya lowered the price target on Arm Holdings (NASDAQ: ARM) to $260 (from $460) while maintaining a Neutral rating.

“ARM posted modestly better JunQ/SepQ, driven by continued share/content gains in AI/data center, offset by n-t smartphone weakness.

Over the long-term, we believe ARM is well positioned to benefit from rising demand for agentic CPUs (see our recent server CPU primer), across both IP (key CSS products Axios/Cobalt ramping in FY27-28 and increasing content/core over time) and its new AGI chiplet CPUs.

However, we believe investor expectations remain high around both, and overall supply constraints cap any near-term upside.

We modestly raise FY27-28E ests on continued Licensing growth and modestly higher AGI supply outlook in FY28, but reiterate Neutral as we see the stock as already fairly valued at current AGI CPU shipment/share outlook.

Lower PO to $260 from $460, given recent re-rating in peer multiple, based on sum-of-parts that values IP business at 2.0x PEG (~$203) and chips business at 21x PE (~$57).”

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