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

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM) gapped up before the market opened on Thursday . The stock had previously closed at $113.92, but opened at $120.71. ARM shares last traded at $120.1670, with a volume of 5,791,692 shares trading hands.

ARM News Summary

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Susquehanna upgraded ARM, saying its confidence in ARM’s data-center roadmap has increased — the upgrade is cited as a near-term catalyst lifting sentiment and buy-side interest. Arm in spotlight as Susquehanna upgrades
• Positive Sentiment: Reports on Nvidia’s long-rumored N1X Arm chip (20-core CPU paired with RTX graphics) bolster the narrative that major vendors will push Arm into PC/gaming and potentially edge/data-center segments — a validation for ARM’s IP licensing model. Nvidia’s long-rumored N1X Arm chip pairs a 20-core CPU with RTX graphics
• Positive Sentiment: Microsoft’s Xbox app coming to Arm-based Windows 11 PCs (reports across outlets) expands Arm’s software/gaming ecosystem and could increase demand for Arm-based consumer devices — a tangible near-term validation of Arm-enabled PC usability. Arm-Based Windows 11 PCs Can Now Download and Play Games
• Positive Sentiment: Recent quarterly results showed revenue and EPS beats with raised near-term guidance, supporting the bullish case that ARM’s royalty/licensing growth is accelerating (helps justify optimistic analyst revisions).
• Neutral Sentiment: Analyst/compare pieces (e.g., Zacks comparing Coherent vs. ARM) highlight valuation and margin trade-offs versus peers — useful context for investors weighing relative-value but not an immediate price driver. COHR vs. ARM: Which Tech Growth Stock Is the Better Buy Now?
• Neutral Sentiment: Market commentary/video pieces note that ARM remains a tech underperformer from its highs but that upgrades could drive catch-up — useful color but not a hard fundamental change. ARM Flexes Rally After Upgrade, Stock Remains Tech Underperformer
• Negative Sentiment: Valuation and volatility are key risks: ARM trades at a high P/E and has a steep beta, leaving the stock sensitive to sentiment shifts and disappointing execution — investors should weigh upside from adoption against high expectations.

Analyst Upgrades and Downgrades

ARM has been the topic of a number of analyst reports. Barclays increased their price objective on ARM from $115.00 to $165.00 and gave the company an “overweight” rating in a report on Thursday, November 6th. Morgan Stanley lowered their price target on ARM from $180.00 to $171.00 and set an “overweight” rating on the stock in a report on Thursday, October 9th. Needham & Company LLC reissued a “hold” rating on shares of ARM in a research report on Thursday, November 6th. Susquehanna upgraded shares of ARM from a “neutral” rating to a “positive” rating and set a $150.00 price objective for the company in a research note on Wednesday. Finally, Benchmark reiterated a “hold” rating on shares of ARM in a research note on Thursday, November 6th. Sixteen investment analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus price target of $173.86.

ARM Price Performance

The firm’s 50 day moving average price is $122.83 and its 200-day moving average price is $141.26. The firm has a market cap of $126.51 billion, a price-to-earnings ratio of 153.55, a P/E/G ratio of 6.42 and a beta of 4.34.

ARM (NASDAQ:ARM) last issued its quarterly earnings results on Wednesday, November 5th. The company reported $0.39 earnings per share for the quarter, beating analysts’ consensus estimates of $0.33 by $0.06. The firm had revenue of $1.14 billion during the quarter, compared to the consensus estimate of $1.06 billion. ARM had a net margin of 18.81% and a return on equity of 15.03%. The business’s revenue was up 34.5% on a year-over-year basis. During the same period in the prior year, the firm earned $0.30 EPS. ARM has set its Q3 2026 guidance at 0.370-0.450 EPS. Analysts expect that ARM Holdings PLC Sponsored ADR will post 0.9 EPS for the current year.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the company. Franklin Street Advisors Inc. NC boosted its stake in ARM by 17.4% during the fourth quarter. Franklin Street Advisors Inc. NC now owns 125,062 shares of the company’s stock worth $13,671,000 after buying an additional 18,522 shares in the last quarter. Rheos Capital Works Inc. raised its stake in shares of ARM by 20.1% in the 4th quarter. Rheos Capital Works Inc. now owns 179,600 shares of the company’s stock valued at $19,632,000 after buying an additional 30,000 shares in the last quarter. Newbridge Financial Services Group Inc. lifted its holdings in shares of ARM by 54.0% during the 4th quarter. Newbridge Financial Services Group Inc. now owns 90,145 shares of the company’s stock worth $9,854,000 after acquiring an additional 31,610 shares during the period. Rathbones Group PLC boosted its position in shares of ARM by 4,638.8% during the 4th quarter. Rathbones Group PLC now owns 500,043 shares of the company’s stock valued at $54,660,000 after acquiring an additional 489,491 shares in the last quarter. Finally, Tran Capital Management L.P. bought a new stake in ARM in the fourth quarter valued at about $20,714,000. 7.53% of the stock is currently owned by institutional investors and hedge funds.

About ARM

Arm Limited (NASDAQ: ARM) is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm’s product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.