Key Stats for ARM Holdings Stock
- Current Price: $307.43
- Target Price (Mid): ~$1,531
- Street Mean Target: ~$255
- Potential Total Return: ~398%
- Annualized IRR: ~40% / year
- Earnings Reaction: +13.63% (May 6, 2026)
- Max Drawdown: 41.47% on 2/3/26
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What Happened?
Arm Holdings (ARM) hit an all-time intraday high near $421 on June 1 after Nvidia unveiled the RTX Spark superchip at Computex in Taipei, then retreated to $307.43 over the following ten days, a 27% drawdown in a stock that had already surged roughly 240% year to date before it got there.
The selloff did not happen in a vacuum. In mid-May, Bloomberg reported that the U.S. Federal Trade Commission had opened a formal antitrust investigation into Arm’s semiconductor licensing practices. That probe arrived roughly six weeks after CEO Rene Haas announced the company’s first production silicon in its more than 35-year history: the AGI CPU, a 136-core server processor built for agentic AI workloads (meaning AI that autonomously completes multi-step tasks, rather than answering single queries).
The FTC’s concern is whether Arm will degrade or deny architecture licenses to third-party chip customers as it builds a competing silicon business. That goes directly to the tension at the heart of Arm’s new model. A careful reading of the Q4 fiscal 2026 earnings call suggests Haas was preparing for that question long before regulators asked it.
What the Earnings Call Said About the Ecosystem Risk
The FTC probe is new. The tension it describes is not.
On the Q4 fiscal 2026 earnings call, William Blair analyst Sebastien Naji asked how Arm’s major customers had reacted to the silicon launch, specifically noting the “potential tension” between Arm’s product and IP businesses. Haas answered deliberately: “We went to them early on this, and we explained to them what we were doing… and every single partner we asked said yes.” He said more than 50 ecosystem partners, including licensees such as AWS, Google, Microsoft, and Nvidia, publicly endorsed the AGI CPU strategy at the Arm Everywhere event.
That process matters for investors watching the probe. Arm’s argument is that its silicon business lifts all boats by driving broader software standardization on Arm architecture, which benefits every company building chips on Arm IP. Whether regulators accept that argument is uncertain. But this is not a company that stumbled into the conflict unprepared.
CFO Jason Child confirmed on the same call that Arm’s data center royalty revenue, the per-chip fees Arm collects from hyperscalers deploying custom Arm silicon, more than doubled year-over-year in Q4 fiscal 2026 and is expected to double again in fiscal 2027. That momentum is precisely what makes the FTC scrutiny pointed: a dominant IP licensor entering the silicon market at the moment its hyperscaler royalty stream is accelerating fastest.
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Two Revenue Engines, One Supply Problem
Arm’s fiscal 2026 full-year results were strong on every line. Revenue reached $4.92 billion, up 23% year-over-year, marking the company’s third consecutive year of greater than 20% growth since its 2023 IPO.
The AGI CPU is a third revenue vector on top of licensing and royalties. Haas said on the call that the two existing streams “are going to run in tandem with each other” rather than compete. On Arm’s own long-term projections (shared on the earnings call), IP revenue is expected to reach $10 billion by fiscal year 2031. The AGI CPU carries a separate $15 billion target for the same period.
The near-term challenge is supply. As of the earnings call, Arm had line of sight to over $2 billion in AGI CPU demand across fiscal 2027 and 2028, more than double the $1 billion stated at the March launch event just six weeks prior. Child said Arm is maintaining the $1 billion revenue guidance while securing additional wafer capacity from TSMC, which manufactures the chip on its 3nm process. He guided for the first production revenue of around $90 million in Q4 fiscal 2027, with the bulk arriving in fiscal 2028, subject to supply chain resolution. Haas put it plainly: “the teams are working around the clock to make sure we can find the right answers for our customers.”
The demand is not in question. The manufacturing access is.
How Arm’s Valuation Compares to Peers
Arm’s valuation premium is real and intentional. At the June 10 close, Arm trades at 54.47x NTM EV/Revenue (enterprise value divided by next twelve months of projected revenue) and 115.46x NTM EV/EBITDA. Intel (INTC) trades at 9.36x NTM EV/Revenue and 27.60x NTM EV/EBITDA. Rambus (RMBS), the closest structural peer as a semiconductor IP licensor, trades at 16.34x NTM EV/Revenue and 33.63x NTM EV/EBITDA.
Arm’s revenue multiple is roughly 3.3x higher than Rambus’s. The difference comes down to growth: Arm’s forward two-year revenue CAGR per TIKR is around 28%, powered by data center royalties growing above 100% year-over-year and an AGI CPU business not yet in full production. Rambus has no comparable driver. Intel’s discount reflects a structural reversal in the data center: one architecture losing share, the other gaining it.
Whether Arm’s 54x revenue multiple is warranted at this entry point is exactly what the TIKR model addresses.
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TIKR Advanced Model Analysis
- Current Price: $307.43
- Target Price (Mid): ~$1,531
- Potential Total Return: ~398%
- Annualized IRR: ~40% / year
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The TIKR mid-case model assumes a revenue CAGR of approximately 50% through March 31, 2031. The two primary drivers are data center royalty growth (management guided for a second consecutive doubling in fiscal 2027) and AGI CPU revenue scaling toward Arm’s own $15 billion target by fiscal 2031. A net income margin of around 44% underpins the earnings estimate. The mid-case produces a target of approximately $1,531, representing around 398% total return and an annualized IRR of about 40% from the current price.
TIKR consensus estimates show revenue reaching approximately $5.97 billion in fiscal 2027 (around 21% growth) and $8.0 billion in fiscal 2028 (around 34% growth). Both sit well below the model’s 50% CAGR assumption, meaning the TIKR target requires Arm to meaningfully outperform current street expectations, primarily through AGI CPU revenue materializing at scale.
The risks are distinct. On the regulatory side, an FTC ruling that forces standardized, non-discriminatory licensing terms would compress the premium economics of large strategic licensing deals. On the competitive side, AMD’s EPYC Venice (already shipping on TSMC’s 2nm process) and Nvidia’s Vera CPU rack both target the same agentic AI data center market as the AGI CPU. If Arm cannot close the TSMC 3nm supply gap in time, customers have alternatives available now.
The street mean target of approximately $255 sits 17% below today’s price, making this a Buy-majority consensus where the average analyst target implies a loss from the current level. That gap reflects models that have not kept pace with a stock up roughly 240% year to date. Mizuho raised its target to $500 in early June, citing Computex and estimating Arm could pull its $15 billion AGI CPU target forward from fiscal 2031. The TIKR model’s longer-horizon view supports that directional argument.
Conclusion
The FTC probe was always coming. Any company that spent more than 35 years as the semiconductor industry’s neutral IP provider and then entered the market as a direct competitor to its own licensees was going to attract regulatory scrutiny. The question is what the investigation finds, not whether it happens.
Arm’s pre-launch approach, securing public endorsements from every major licensee before the product announcement, is a defensible posture. It is not a guaranteed outcome, and investors at the current price carry that regulatory uncertainty alongside a 115x NTM EV/EBITDA multiple.
The number to watch: the Q3 fiscal 2027 earnings call (expected around February 2027) is when Child said Arm will provide a firmer estimate on Q4 AGI CPU revenue. If Arm confirms supply is on track to deliver that first roughly $90 million silicon quarter, the TSMC capacity gap is closing and the $15 billion fiscal 2031 target is on schedule. If that guidance slips, the FTC overhang and the valuation make for a difficult combination.
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Should You Invest in ARM Holdings?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up ARM Holdings, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track ARM Holdings alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
