ARM (NASDAQ:ARM) Shares Gap Up – Still a Buy?

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) gapped up prior to trading on Friday. The stock had previously closed at $306.34, but opened at $318.50. ARM shares last traded at $321.7910, with a volume of 1,789,263 shares trading hands.

ARM News Summary

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Investor interest was renewed after the recent sell-off, with buyers viewing Arm as a key beneficiary of rising demand for CPUs used in AI inference and data-center workloads. Arm Climbs as Buyers Return After Sharp Pullback
• Positive Sentiment: Meta’s reported adoption of its Muse AI agent is supporting expectations for continued CPU demand. Because Arm licenses processor designs and collects royalties, broader use of Arm-based chips in AI systems could increase future revenue. Arm Stock Rises on Possible Continued Momentum From Meta’s Muse AI Launch
• Positive Sentiment: Investor commentary continues to frame ARM as an important supplier of intellectual property for agentic AI and hyperscale data centers. A bullish outlook argues that expanding server workloads could create a long-term royalty opportunity. Arm Seen as a Data-Center Royalty Opportunity

Analysts Set New Price Targets

A number of analysts have commented on the company. Raymond James Financial reissued an “outperform” rating on shares of ARM in a report on Tuesday, August 25th. Morgan Stanley increased their price objective on ARM from $202.00 to $212.00 and gave the company an “equal weight” rating in a research report on Thursday, July 30th. New Street Research upgraded ARM from a “neutral” rating to a “buy” rating and set a $260.00 price objective for the company in a report on Thursday, July 30th. Sanford C. Bernstein set a $500.00 target price on ARM in a research report on Wednesday, June 17th. Finally, HSBC cut shares of ARM from a “buy” rating to a “hold” rating and upped their target price for the company from $255.00 to $315.00 in a research note on Tuesday, July 14th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $305.72.

ARM Trading Up 3.8%

The firm has a market capitalization of $339.77 billion, a P/E ratio of 326.70, a P/E/G ratio of 9.88 and a beta of 3.89. The stock has a 50 day simple moving average of $263.18 and a 200-day simple moving average of $253.73.

ARM (NASDAQ:ARM) last issued its quarterly earnings data on Thursday, July 30th. The company reported $0.45 earnings per share for the quarter, topping the consensus estimate of $0.40 by $0.05. The firm had revenue of $1.29 billion for the quarter, compared to analysts’ expectations of $1.26 billion. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business’s quarterly revenue was up 22.4% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.35 EPS. As a group, sell-side analysts expect that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Buying and Selling

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

Institutional Investors Weigh In On ARM

Hedge funds have recently modified their holdings of the business. Syntax Research Inc. purchased a new stake in shares of ARM in the 1st quarter worth $30,000. Evelyn Partners Investment Management Services Ltd bought a new position in ARM in the 1st quarter worth $30,000. Allied Private Wealth LLC purchased a new position in ARM during the second quarter valued at $71,000. Cassaday & Co Wealth Management LLC purchased a new position in ARM during the first quarter valued at $40,000. Finally, Motiv8 Investments LLC bought a new stake in ARM during the fourth quarter valued at about $38,000. Institutional investors own 7.53% of the company’s stock.

ARM Company Profile

Arm Holdings plc is a semiconductor and software intellectual property company headquartered in Cambridge, England. Rather than manufacturing chips, Arm develops processor architectures and technology designs that it licenses to semiconductor companies, device manufacturers and other technology businesses for use in their own products.

Arm’s portfolio includes central processing unit (CPU) architectures and processor cores, graphics processing units (GPUs), systems IP, interconnect technology, security solutions and related software and development tools.