Analyst Vivek Arya from Bank of America Securities maintained a Buy rating on ARM Holdings PLC ADR and keeping the price target at $180.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight ARM Holdings PLC ADR’s strong long-term growth potential. One of the key reasons is the company’s significant penetration of its v9 architecture in the mobile sector, which currently accounts for over 50% of sales but only 15-20% of units. This indicates a substantial opportunity for growth as all customers, including Qualcomm, are expected to transition to the higher royalty rate associated with v9. Furthermore, the development of v10 and ARM’s own hardware products, such as CPUs, suggests a promising future for the company in expanding its content and market presence.
Additionally, ARM’s data center strategy is poised to enhance its revenue streams. The company is working on increasing its royalty sales per CPU core and expanding its IP stack footprint by offering more content per core and more cores per chip. This approach, coupled with the potential for ARM-designed hardware, positions the company well to capture a larger share of the data center market. Despite some near-term challenges, such as high operating expenses, ARM’s consistent sales and EPS growth projections of 15-20% over the next decade and strong recurring revenue visibility make it an attractive investment opportunity.
According to TipRanks, Arya is a top 100 analyst with an average return of 18.8% and a 62.30% success rate. Arya covers the Technology sector, focusing on stocks such as Nvidia, Advanced Micro Devices, and ON Semiconductor.
In another report released yesterday, Loop Capital Markets also reiterated a Buy rating on the stock with a $155.00 price target.