Key Stats for ARM Holdings Stock
- Current Price: $201.61
- Street Target (Mean): ~$170
- TIKR Model Target (Mid): ~$58
- Potential Total Return (Mid): ~193%
- Annualized IRR (Mid): ~32% / year
- Earnings Reaction: +5.70% (February 4, 2026)
- Max Drawdown: -41.47% (February 3, 2026)
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
ARM Holdings (ARM) dropped 8% on Tuesday after a Wall Street Journal report revealed OpenAI missed internal revenue and user growth targets, with the company’s CFO raising concerns internally about its ability to fund future computing commitments. The trigger hit names priced for momentum: after parabolic runs, any crack in the AI demand narrative becomes a profit-taking event.
The timing stings. From a close near $137 in late March, ARM climbed to an intraday high of $237.68 by April 24, driven by the March 25 ARM Everywhere event and a flood of analyst upgrades. The stock had surged more than 50% from its April 7 low in less than three weeks before Tuesday’s pullback.
Bulls and bears are now asking the same question: was that rally pricing in a real structural shift in data center economics, or did the stock simply run too far ahead of any actual revenue?
The bear case is concrete. Morgan Stanley downgraded Arm to Equal-Weight on April 7, warning that entering merchant silicon would pressure margins, since hardware gross margins typically run between 40% and 50% compared to the 97% Arm earns from royalties today.
CEO Rene Haas also sold approximately 41,000 shares for around $6.6 million, and CFO Jason Child sold approximately 42,500 shares for close to $7 million in recent months. At around 103x NTM earnings, per TIKR data, there is almost no cushion for execution disappointment.
What that framing misses is what was actually said on stage at Fort Mason on March 25.
See historical and forward estimates for ARM Holdings stock (It’s free!) >>>
Is ARM Holdings Undervalued Today?
The Arm Everywhere event was not a product demo. It was a structural argument about where CPU demand is heading, delivered by the companies that will actually buy the chips.
CEO Rene Haas explained the math directly: traditional AI data centers need roughly 30 million CPU cores per gigawatt of capacity. Agentic AI, meaning autonomous systems that run workflows, execute code, and operate continuously without human prompts, pushes that requirement to approximately 120 million cores per gigawatt.
That is a fourfold increase in CPU demand from the same power budget. TrendForce projects the CPU-to-GPU ratio in data centers will shift from roughly 1:4 today toward 1:1 in agentic AI deployments.
Arm is uniquely positioned here because its architecture was built from day one for power efficiency. That is why both Meta and OpenAI sent senior executives to validate the thesis publicly, not just attend a launch.
Santosh Janardhan, Meta’s head of infrastructure, said the company surveyed every available CPU before choosing Arm: “If we met the performance, we couldn’t get the power. If we got the power, we couldn’t get the performance.” Meta’s Prometheus cluster is already on track to exceed one gigawatt by the end of 2026, with a planned Hyperion cluster targeting five gigawatts. The CPU demand those clusters require is exactly what the AGI CPU is designed to address.
OpenAI’s Chief Product Officer Kevin Weil made the cost case plainly: “If you have a CPU that can draw less power but be just as performant, it means you have more leftover for everything else. That means more intelligence.” Given this week’s news about OpenAI’s cost pressures, that logic is a reason to accelerate power-efficient silicon adoption, not pull back from it.
On valuation multiples, ARM trades at around 37x NTM EV/Revenue and around 82x NTM EV/EBITDA, per TIKR. Those figures are steep. Intel trades at roughly 7.5x NTM EV/Revenue and around 22.5x NTM EV/EBITDA. NXP Semiconductors sits at around 4.6x and 11.6x. ARM trades at more than eight times the peer median NTM EV/Revenue of 4.58x, per TIKR’s Competitors page.
That premium is only justified if Arm’s economic moat is genuinely unreplicable. More than 1.25 billion Arm Neoverse cores have already shipped into data centers, and over 22 million software developers code for the Arm platform. Any x86 competitor chasing agentic AI orchestration has to redesign the silicon and get every cloud operator to re-optimize their software stack. Arm enters that fight with the ecosystem already built. That is a real advantage, not a slide deck claim.
The risk worth taking seriously is margin dilution. Arm’s 97.5% LTM gross margin, per TIKR, exists because it earns royalties, not hardware revenue. Merchant silicon changes the mix. The Street’s mean target of around $170, sitting below today’s $201.61, reflects that uncertainty. The current price running ahead of analyst consensus is not automatically a red flag, but it does mean investors are pricing in a scenario the models have not yet fully captured.
See how ARM Holdings performs against its peers in TIKR (It’s free!) >>>
TIKR Advanced Model Analysis
- Current Price: $201.61 (model entry: $198.65)
- TIKR Mid-Case Target: ~$580
- Potential Total Return: ~193%
- Annualized IRR: ~32% / year
See analysts’ growth forecasts and price targets for ARM Holdings stock (It’s free!) >>>
The mid-case rests on two revenue drivers: royalty mix shifting toward Armv9, Arm’s most advanced architecture tier, and the AGI CPU silicon ramp beginning to generate material revenue in 2028 per Haas’s own guidance. The margin driver is operating leverage on the existing IP business, as fixed-cost R&D supports both licensing and the new silicon line simultaneously.
The upside: the ~$580 mid-case does not yet embed the $15 billion silicon revenue target Haas committed to publicly. If that ramp arrives on schedule, the mid-case looks conservative.
The downside: at around 103x forward earnings, Arm has limited room if hyperscalers compress data center CapEx and the AGI CPU timeline slips. This week’s OpenAI news is a reminder that the demand curve is not guaranteed.
Conclusion
Watch two things at the May 6 Q4 FY2026 earnings call: whether revenue hits management’s $1.47 billion guidance, and whether FY2027 guidance clears the current consensus of around $5.9 billion with concrete AGI CPU production timelines for the second half of 2026.
Arm spent 35 years building the only power-efficient CPU architecture that scales from a smartphone battery to a five-gigawatt data center. Agentic AI may be the moment that position becomes the most valuable in the stack.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
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.
Analyze ARM Holdings on TIKR Free →
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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!
