ARM Holdings PLC ADR (ARM)
NASDAQ:ARM
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ARM Holdings PLC ADR
(NASDAQ:ARM)
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Rating:80Outperform
Price Target:
$245.00
▲(46.94% Upside)
Action:Reiterated
Date:05/09/26
The score is driven by strong financial quality (high growth, strong margins, and a conservative balance sheet) and supportive technical momentum (price above major moving averages with positive MACD). Offsetting these strengths, valuation is a meaningful headwind given the very high P/E and lack of dividend yield support, while the earnings call underscores near-term execution risks around AGI CPU supply constraints, OpEx growth, and licensing/royalty volatility.
Positive Factors
Diversified licensing & royalty growth
Arm's mix of upfront licensing and ongoing royalties creates recurring, scalable revenue tied to device and data‑center shipments. Strong YoY license and royalty growth plus 22% ACV expansion indicate a durable revenue base that benefits from secular growth in mobile, IoT and cloud AI over the medium term.
Negative Factors
AGI CPU supply constraints
Material demand outstrips initial capacity, creating execution risk for scaling chip shipments and realizing projected AGI CPU revenue. Persistent supply chain bottlenecks could delay customer ramps, compress near‑term margins and push out multi‑year revenue targets even if demand remains strong.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified licensing & royalty growth
Arm's mix of upfront licensing and ongoing royalties creates recurring, scalable revenue tied to device and data‑center shipments. Strong YoY license and royalty growth plus 22% ACV expansion indicate a durable revenue base that benefits from secular growth in mobile, IoT and cloud AI over the medium term.
Read all positive factors
ARM Holdings PLC ADR Key Performance Indicators (KPIs)
Any
Annualized Contract Value
Measures the yearly value of all active contracts, highlighting the company's revenue potential and customer commitment levels.
Measures the yearly value of all active contracts, highlighting the company's revenue potential and customer commitment levels.
Data provided by:
The Fly
The FlyARM Holdings PLC ADR (ARM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$222.55B
Dividend YieldN/A
Average Volume (3M)7.01M
Price to Earnings (P/E)177.6
Beta (1Y)2.46
Revenue Growth22.79%
EPS Growth12.94%
CountryUS
Employees8,330
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.84
Shares Outstanding1,061,000,000
10 Day Avg. Volume5,102,422
30 Day Avg. Volume7,006,627
Financial Highlights & Ratios
PEG Ratio13.32
Price to Book (P/B)19.37
Price to Sales (P/S)32.62
P/FCF Ratio163.95
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue46.05
Enterprise Value/Gross Profit48.66
Enterprise Value/Ebitda165.98
Forecast
1Y Price Target
$253.35Price Target Upside51.95% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering22
EPS Forecast (FY)2.17
Revenue Forecast (FY)$5.98B
ARM Holdings PLC ADR Business Overview & Revenue Model
Company Description
Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. It offers microprocessors, systems intellec...
How the Company Makes Money
Arm primarily makes money by licensing its semiconductor IP and collecting royalties on chips that ship using that IP. (1) Licensing revenue: customers (typically chip designers and semiconductor companies) pay fees to access Arm architectures, co...
ARM Holdings PLC ADR Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call communicated strong, broad-based growth with record revenue, EPS and accelerating data center momentum driven by Arm AGI CPU demand and expanding cloud adoption. Key positives include double-digit revenue growth, record margins, ACV growth, and major customer support and design wins. Near-term challenges include supply-chain/capacity limits for AGI CPU production, elevated R&D-driven operating expenses (up ~30% YoY), and some royalty volatility from mobile market comp and unit weakness. Management maintained conservative near-term guidance while expressing confidence in multi-year targets (e.g., $15B AGI CPU by FYE31) and long-term margin expansion.Positive Updates
Record Quarterly and Fiscal Year Revenue
Q4 revenue of $1.49B, up 20% year-over-year (highest quarterly revenue ever); fiscal 2026 revenue of $4.92B, up 23% year-over-year.
Negative Updates
Supply Chain Constraints for AGI CPU Production
Although demand for Arm AGI CPU grew to >$2B for FY27–28, supply (wafers, memory, packaging, test equipment) was sized initially to support ~$1B; company is actively securing additional capacity and therefore did not raise near-term revenue guidance for AGI CPU despite higher demand.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Quarterly and Fiscal Year Revenue
Q4 revenue of $1.49B, up 20% year-over-year (highest quarterly revenue ever); fiscal 2026 revenue of $4.92B, up 23% year-over-year.
Read all positive updates
Company Guidance
For Q1 of fiscal 2027 Arm guided revenue of $1.26 billion ± $50 million (about +20% YoY), with both royalty and license & other revenue each expected to be up around 20% YoY, non‑GAAP operating expense of ~ $760 million, and non‑GAAP EPS of $0.40 ± $0.04. Management reiterated first production Arm AGI CPU revenues are expected in the fourth quarter of this fiscal year, is maintaining a near‑term AGI CPU outlook of $1 billion (while noting > $2 billion of customer demand across FY27–FY28) and reaffirmed long‑term targets of $15 billion AGI CPU revenue + $10 billion IP revenue (total $25 billion) by FYE31 (translating to > $9 EPS). They also said ACV grew 22% YoY, license revenue is expected to be back‑end weighted (~60% H2), royalty growth is expected in the ~20% range for the year, OpEx will increase modestly quarter‑to‑quarter but grow less than revenue (driving incremental margin improvement), and first‑gen chip gross margins are ~30%+.ARM Holdings PLC ADR Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
78
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.92B | 4.01B | 3.23B | 2.68B | 2.70B |
| Gross Profit | 4.55B | 3.80B | 3.00B | 2.48B | 2.48B |
| EBITDA | 1.16B | 902.90M | 374.00M | 841.20M | 962.50M |
| Net Income | 904.00M | 792.00M | 306.00M | 524.00M | 549.00M |
Balance Sheet | |||||
| Total Assets | 10.70B | 8.93B | 7.93B | 6.87B | 6.51B |
| Cash, Cash Equivalents and Short-Term Investments | 3.60B | 2.83B | 2.92B | 2.21B | 1.64B |
| Total Debt | 432.00M | 356.00M | 226.00M | 219.00M | 261.00M |
| Total Liabilities | 2.42B | 2.09B | 2.63B | 2.81B | 2.96B |
| Stockholders Equity | 8.29B | 6.84B | 5.29B | 4.05B | 3.55B |
Cash Flow | |||||
| Free Cash Flow | 979.00M | 178.00M | 947.00M | 646.00M | 383.00M |
| Operating Cash Flow | 1.52B | 397.00M | 1.09B | 739.00M | 458.00M |
| Investing Cash Flow | -325.00M | -35.00M | -516.00M | -138.00M | -619.00M |
| Financing Cash Flow | -548.00M | -202.00M | -208.00M | -42.00M | -32.00M |
ARM Holdings PLC ADR Technical Analysis
Positive
166.73
Price Trends
134.13
Positive
126.68
Positive
138.62
Positive
Market Momentum
8.62
Negative
68.29
Neutral
88.50
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARM, the sentiment is Positive. The current price of 166.73 is above the 20-day moving average (MA) of 150.00, above the 50-day MA of 134.13, and above the 200-day MA of 138.62, indicating a bullish trend. The MACD of 8.62 indicates Negative momentum. The RSI at 68.29 is Neutral, neither overbought nor oversold. The STOCH value of 88.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARM.
ARM Holdings PLC ADR Risk Analysis
ARM Holdings PLC ADR disclosed 87 risk factors in its most recent earnings report. ARM Holdings PLC ADR reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our development of CSS, chiplets, and complete end chip solutions as well as other more integrated compute products may subject us to new or enhanced competitive, brand, technological, regulatory and financial risks. Q1, 2025
ARM Holdings PLC ADR Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $212.37B | 4.59 | 40.19% | 2.01% | 5.21% | -6.72% | |
80 Outperform | $222.55B | 177.55 | 11.86% | ― | 22.79% | 12.94% | |
78 Outperform | $691.54B | 60.29 | 8.05% | ― | 34.97% | 123.87% | |
77 Outperform | $73.60B | 10.55 | 26.14% | 1.79% | 2.37% | 13.28% | |
74 Outperform | $275.51B | 28.56 | 32.49% | 3.11% | 14.89% | 10.49% | |
63 Neutral | $546.68B | -14.70 | -2.95% | ― | 1.36% | 86.07% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ARM
ARM Holdings PLC ADR
209.16
77.11
58.39%
AMD
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269.62%
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108.77
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QCOM
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201.49
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34.16%
TXN
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302.73
119.53
65.24%
ARM Holdings PLC ADR Corporate Events
Arm Holdings Posts Fiscal 2026 Results and Hosts Webcast to Brief Investors
May 6, 2026
Arm Holdings plc reported its financial results for the fourth quarter and fiscal year ended March 31, 2026, via a shareholder letter published on May 6, 2026, on its investor relations website and furnished to the U.S. Securities and Exchange Com...
Arm CEO Rene Haas Takes Additional Helm at SoftBank Group International
Apr 21, 2026
Arm Holdings plc, the British chip designer, said on April 21, 2026 that Chief Executive Officer Rene Haas has taken on the additional role of CEO of SoftBank Group International, effective April 20, 2026. SoftBank Group International oversees cer...
Arm Reaffirms Q4 2026 Outlook at ‘Arm Everywhere’ Investor Event
Mar 24, 2026
Arm Holdings plc disclosed that it hosted its ‘Arm Everywhere’ investor event in March 2026, where management provided an update on the company’s business and strategic direction to the investment community. During the event, hel...
Arm Launches First Arm-Designed Data Center CPU, Marking Shift Into Production Silicon for AI Era
Mar 24, 2026
On March 24, 2026, Arm Holdings plc announced a landmark expansion of its compute platform into production silicon, unveiling its first Arm-designed data center processor, the Arm AGI CPU, built specifically for agentic AI workloads. The move broa...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.