Arm downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Arm (ARM) to Equal Weight from Overweight with a price target of $150, up from $135. The firm says the company’s transition into chip making is a “structural evolution” of its business model amid the emergence of agentic AI. While Arm’s strategic positioning and early design delivery “have been exemplary,” its commercial ramp will take time, the analyst tells investors in a research note. Morgan Stanley adds that near-term execution risks “temper enthusiasm.” The firm also believes end market softness, exacerbated DRAM supply constraints, could “stymie” Arm’s near-term growth.