Rosenblatt Lowers Arm Holdings Price Target to $250

Rosenblatt analyst Kevin Cassidy lowered the price target on Arm Holdings (NASDAQ: ARM) to $250 (from $270) while maintaining a Buy rating.

“Arm delivered a solid beat-n-raise as licensing revenue grew 23% Y/Y and royalties increased 22% Y/Y with data center royalties doubling Y/Y.

Outlook is for licensing revenue to increase 30% Y/Y and royalties up low teens percent Y/Y as smartphone headwinds are slowing royalty rate.

According to management, demand for Arm’s server AGI CPU has doubled in the past three months to over $2B.

Management has secured capacity to deliver $1B+ through FY28 and are working on expanding supply to meet demand.

We see the company as entering a critical time in ramping its first silicon product while expanding its server/PC/physical AI IP business.

We are lowering our 12-month PT to $250 based on lower FY28E Non-GAAP EPS than previously mainly due to lower GM and higher expense estimates.”

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