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Raymond James Reiterates Outperform on Arm Holdings (ARM), Raises PT to $165

Arm Holdings plc (NASDAQ:ARM) is one of the AI Stocks Analysts Are Watching Closely. On July 31, Raymond James analyst Srini Pajjuri raised the price target on the stock to $165.00 (from $140.00) while maintaining an “Outperform” rating.

The rating affirmation follows Arm’s fiscal first-quarter results, which were in-line with expectations. However, fiscal second-quarter outlook was weaker than anticipated.

Royalty revenue grew 25% year-over-year backed by strong data center performance. This was, despite weakness in smartphone and IoT units. The firm also talked about royalty rate expansion.

A financial analyst looking at a monitor filled with stock market charts of U.S. listed semiconductor companies.

“Secular royalty rate expansion remains on track driven by continued ARMv9 adoption. We are also encouraged by early CSS progress (including at Samsung, MSFT, Xiaomi), which essentially doubles the royalty rate. Licensing declined slightly y/y but was better than our model while annualized contract value (ACV) grew 28%.”

Looking ahead, the firm is optimistic on the back of strong v9/CSS adoption and growing Data Center opportunity.

“Management also alluded to expanding into chiplets and full end solutions, which could significantly expand SAM, although margin impact remains unclear. We are lowering EPS partly due to higher OpEx but are raising price target from $140 to $165 on recent peer multiple expansion. Reiterate Outperform.”

Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.

While we acknowledge the risk and potential of ARM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ARM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 Must-Watch AI Stocks on Wall Street  and 10 AI Stocks Making Waves on Wall Street

Disclosure: None.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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