ARM (NASDAQ:ARM) Stock Price Up 3.6% – Still a Buy?

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) shares shot up 3.6% on Tuesday. The company traded as high as $301.00 and last traded at $293.67. 5,994,274 shares traded hands during trading, a decline of 23% from the average daily volume of 7,793,947 shares. The stock had previously closed at $283.33.

Key ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Sector rebound: ARM led a recovery across chip stocks after the broad semiconductor selloff, suggesting Tuesday’s strength was partly driven by renewed risk appetite rather than a company-specific announcement. Arm Jumps 5% as Chip Selloff Unwinds
• Positive Sentiment: AI infrastructure opportunity: NVIDIA’s Open Agent Safety Platform could increase spending on model testing, monitoring and inference. Analysts highlighted Arm as a potential beneficiary because its CPUs may be well positioned for data coordination and AI inference workloads. NVIDIA Just Turned AI Safety Into a Spending Story
• Positive Sentiment: Greater NVIDIA integration: Articles described Arm processor designs as supporting NVIDIA’s AI security and compute strategy, strengthening the case that Arm could become a core supplier of intellectual property for safety-focused AI systems. Arm Becoming a Linchpin of NVIDIA’s AI Strategy
• Positive Sentiment: ARM ecosystem expansion: Sauce Labs launched an enterprise-scale, ARM-native Android testing cloud, potentially improving software compatibility and accelerating adoption of ARM-based devices. Sauce Labs Launches ARM-Native Android Testing Cloud
• Neutral Sentiment: SteamOS support on an ARM-based handheld could broaden consumer gaming use cases for ARM processors, although the immediate licensing or royalty impact for Arm is unclear. Android Handhelds Become Compact Steam Decks
• Negative Sentiment: Valuation and macro risks remain: ARM’s very high earnings multiple leaves the stock sensitive to elevated bond yields, AI-related concerns and further sector-wide selling. A recent analysis nevertheless argued the shares could be undervalued relative to their long-term AI growth potential. Arm Holdings Could Be Undervalued

Analyst Ratings Changes

ARM has been the subject of several recent analyst reports. Barclays upped their target price on shares of ARM from $250.00 to $360.00 and gave the stock an “overweight” rating in a report on Monday, June 1st. KeyCorp boosted their price objective on ARM from $300.00 to $430.00 and gave the company an “overweight” rating in a research report on Tuesday, July 14th. Mizuho upped their price objective on ARM from $425.00 to $500.00 and gave the stock an “outperform” rating in a research note on Monday, June 8th. UBS Group decreased their target price on ARM from $360.00 to $320.00 and set a “buy” rating on the stock in a research note on Thursday, July 30th. Finally, Sanford C. Bernstein set a $500.00 price target on ARM in a report on Wednesday, June 17th. One research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of $303.32.

ARM Trading Up 3.6%

The firm’s 50 day simple moving average is $264.31 and its 200 day simple moving average is $256.24. The firm has a market cap of $313.66 billion, a PE ratio of 302.76, a PEG ratio of 9.20 and a beta of 3.89.

ARM (NASDAQ:ARM) last issued its quarterly earnings data on Thursday, July 30th. The company reported $0.45 earnings per share for the quarter, beating analysts’ consensus estimates of $0.40 by $0.05. ARM had a return on equity of 12.24% and a net margin of 20.25%.The firm had revenue of $1.29 billion during the quarter, compared to analyst estimates of $1.26 billion. During the same quarter last year, the business posted $0.35 earnings per share. The business’s quarterly revenue was up 22.4% compared to the same quarter last year. As a group, equities research analysts predict that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Activity

In other news, CFO Jason Child sold 10,400 shares of the stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $300.00, for a total transaction of $3,120,000.00. Following the completion of the transaction, the chief financial officer directly owned 153,442 shares in the company, valued at approximately $46,032,600. This represents a 6.35% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Hedge Funds Weigh In On ARM

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Hyperion Asset Management Ltd grew its position in shares of ARM by 28.0% during the 4th quarter. Hyperion Asset Management Ltd now owns 1,836,185 shares of the company’s stock worth $200,713,000 after buying an additional 401,594 shares in the last quarter. Capital Research Global Investors raised its holdings in shares of ARM by 5.1% in the fourth quarter. Capital Research Global Investors now owns 1,805,110 shares of the company’s stock valued at $197,332,000 after acquiring an additional 86,978 shares in the last quarter. Franklin Resources Inc. lifted its stake in ARM by 0.7% in the fourth quarter. Franklin Resources Inc. now owns 1,461,410 shares of the company’s stock worth $159,747,000 after acquiring an additional 10,385 shares during the period. SG Americas Securities LLC grew its holdings in ARM by 265.6% during the 1st quarter. SG Americas Securities LLC now owns 971,067 shares of the company’s stock worth $146,903,000 after acquiring an additional 705,459 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership grew its holdings in ARM by 1,203.5% during the 1st quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company’s stock worth $142,983,000 after acquiring an additional 872,644 shares in the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

About ARM

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops intellectual property used to create energy-efficient computing products. Arm does not generally manufacture chips; instead, it licenses processor architectures, CPU cores, graphics technologies and related system IP to semiconductor companies and original equipment manufacturers, which incorporate them into their own products.

The company’s offerings include the Cortex family of CPUs for mobile, consumer, automotive and embedded applications; Neoverse platforms for cloud and data-center infrastructure; Mali graphics processing units; and Ethos neural processing units designed for artificial intelligence and machine-learning workloads.