In a report released yesterday, Vivek Arya from Bank of America Securities reiterated a Buy rating on ARM Holdings PLC ADR, with a price target of $180.00.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight ARM Holdings PLC’s potential for long-term growth. Despite some short-term macroeconomic and foreign exchange challenges, Arya believes the company is strategically positioning itself for future success through initiatives like chiplets, Project Stargate, and advancements in data center CPU and edge AI. These efforts, coupled with ARM’s unique royalty model, are expected to provide sustained revenue visibility over the coming years.
Furthermore, Arya anticipates ARM to be a consistent performer with a 15-20% growth in sales and earnings per share over the next decade, supported by its significant customer, SoftBank, which is a leader in the global AI rollout. Although there are some risks, such as dependency on SoftBank and high operating expenses, Arya’s positive outlook is bolstered by ARM’s potential to expand its total addressable market by moving up the value chain with higher royalty rates on new solutions. This potential for future growth justifies the raised price objective of $180, reflecting confidence in ARM’s strategic direction.
ARM’s price has also changed slightly for the past six months – from $153.230 to $163.325, which is a 6.59% increase.