Key Stats for Arm Holdings Stock
- 52-Week Range: $100 to $197
- Current Price: $197
- Street Mean Target: $170
- Street High Target: $240
- TIKR Model Target (Dec. 2030): $576
What Happened?
Arm Holdings (ARM), the British chip designer whose processor architecture powers roughly 99% of the world’s smartphones, crossed its 52-week high at $197 after announcing a pivot that fundamentally changes what kind of company it is.
On March 24, at the “Arm Everywhere” investor conference in San Francisco, Arm unveiled the AGI CPU, the company’s first self-designed silicon chip, moving beyond licensing intellectual property to selling finished processors directly to AI data center customers.
The AGI CPU, built on TSMC’s 3-nanometer process with 136 high-performance cores and a 300-watt thermal design, targets agentic AI workloads, the always-on, multistep task execution systems that require CPU coordination rather than GPU processing.
CEO Rene Haas stated at the Arm Everywhere conference that “it’s a very pivotal moment for the company,” projecting the AGI CPU alone will generate roughly $15 billion in annual revenue within five years, with ARM’s total revenue reaching $25 billion at the same horizon.
Meta Platforms signed on as lead development partner with OpenAI, Cloudflare, SAP, and SK Telecom already committed as customers, and production is slated for the second half of this year, with Arm already holding $1 billion in committed customer revenue for 2028 alone.
On April 21, Haas formalized a concurrent role as CEO of SoftBank Group International, the entity overseeing SoftBank’s semiconductor and AI portfolio, positioning ARM’s leadership at the center of SoftBank’s Project Izanagi, its initiative to compete directly with Nvidia in AI chips.
Wall Street’s Take on Arm Holdings Stock
The AGI CPU doesn’t just add a revenue line — it rewrites the denominator on every forward multiple the Street has been using to price Arm Holdings stock, since licensing revenue never captured more than a royalty slice of each chip’s economics.
ARM’s consensus revenue estimate sits at around $4.9 billion for FY26, growing to around $5.9 billion in FY27 and accelerating to around $7.6 billion in FY28 as the AGI CPU ramp begins to register; the $15 billion silicon revenue target Haas committed to at Arm Everywhere is not meaningfully embedded in any of those numbers yet.
Twenty analysts currently rate ARM a buy or outperform, ten hold, and two sell, with a mean price target of around $170, a figure that now sits 14% below where Arm Holdings stock is trading, suggesting most Street models were written before March 24.
The spread between the $95 low target and the $240 high target reflects two entirely different companies: bears are pricing a licensing business with decelerating smartphone royalties, while bulls are pricing a company capturing direct silicon economics across the $100 billion CPU TAM Haas outlined at the investor conference.
Revenue of around $4.9 billion in FY26 growing to around $7.6 billion by FY28, with the AGI CPU’s direct sales still largely absent from those estimates, leaves Arm Holdings stock appearing undervalued against the forward revenue trajectory CEO Haas has explicitly quantified on record.
The signal is the $1 billion in committed 2028 customer revenue already on Arm’s books, with Haas stating that number is expected to double annually through 2030, a contractually anchored growth cadence the licensing business never had.
If smartphone unit volumes decline by more than the 15% already modeled by partners such as MediaTek, royalty revenue takes a hit that Street models have not fully stress-tested against the AGI CPU investment costs.
The Q4 FY2026 earnings call on May 6 is the first event where forward guidance incorporating AGI CPU revenue economics becomes mandatory; watch whether the FY27 revenue estimate shifts above the current around $5.9 billion consensus.
ARM Stock Financials
ARM’s revenue grew from $2.03 billion in FY2021 to $4.01 billion in FY2025, a near-doubling driven by royalty rate expansion and data center share gains, with LTM revenue now reaching $4.67 billion.
The operating margin collapse from 26.6% in FY2023 to 2.4% in FY2024 reflects deliberate investment in AGI CPU development, as Arm added engineering headcount for compute subsystems and next-generation architectures before a single chip had shipped for direct revenue.
The recovery to 20.7% operating margins in FY2025 confirms the investment cycle did not permanently impair profitability, while gross margins held above 97% in FY2025 and 97.5% LTM, reflecting the near-zero variable cost structure of intellectual property delivery.
R&D expenses grew from $1 billion in FY2022 to $2.07 billion in FY2025 and $2.62 billion LTM, a cost line carrying the full weight of the silicon pivot that will only begin generating offsetting chip revenue when AGI CPU production volumes ramp in the second half of this year.
What Does the Valuation Model Say?
TIKR’s mid-case model targets around $576 per share by March 2030, built on a revenue CAGR of around 31% through the forecast window, an assumption that only holds if the AGI CPU ramp tracks the $1 billion in committed 2028 customer revenue and the annual doubling cadence Haas put on record at Arm Everywhere.
With ARM stock at $197 and the TIKR mid-case implying around 193% total return over roughly four years, Arm Holdings stock appears undervalued for investors pricing the silicon business rather than the licensing-only model reflected in the Street’s current around $170 mean target.
The central question in the ARM investment case is not whether agentic AI drives CPU demand — Meta’s infrastructure head, Morgan Stanley, and Haas himself have all made that case publicly — it is whether ARM can capture direct silicon economics without fracturing the licensing ecosystem that generates its current revenue.
What Has to Go Right
- AGI CPU enters volume production in H2 this year as stated, with committed customer revenues from Meta, OpenAI, and Cloudflare converting to recognized revenue by FY2027 and validating Haas’s $15 billion five-year target
- The $1 billion in 2028 customer commitments doubles annually as projected, creating the revenue base for the TIKR model’s around 31% revenue CAGR assumption through 2030
- CSS (Compute Subsystems) royalties, currently approaching 20% of total royalties per CFO Jason Child on the Q3 call and growing, continue expanding as every Android OEM migrates to Arm v9 architecture
- Data center royalty revenue, growing triple digits year-on-year through Q3 FY2026 with Arm Neoverse cores surpassing 1 billion deployed units, provides a revenue floor regardless of AGI CPU production timing
What Could Go Wrong
- Qualcomm, Nvidia, or AMD accelerates competing CPU architecture development specifically to reduce dependence on ARM IP, a risk that intensifies the more successfully the AGI CPU competes against the company’s own licensees
- License renewal pressure at the FY2027 contract cycle emerges as chipmaker customers view ARM as a direct competitor, threatening the $200 million per quarter SoftBank license run rate and the 28% ACV growth the company has sustained through Q3 FY2026
- R&D expenses, already at $2.62 billion LTM versus $0.83 billion in FY2025 operating income, continue rising faster than revenue in FY2027, keeping GAAP margins suppressed and creating multiple compression risk if the AGI CPU ramp is slower than guidance
- Memory supply constraints cited by MediaTek reduce smartphone unit volumes beyond the 15% scenario Jason Child modeled on the Q3 call, creating a royalty revenue headwind that delays the operating leverage needed to absorb the silicon investment
Should You Invest in Arm Holdings plc?
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 stock 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 plc alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Access Professional Tools to Analyze ARM stock on TIKR for Free →
