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

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM)’s share price gapped up prior to trading on Monday . The stock had previously closed at $353.29, but opened at $389.95. ARM shares last traded at $388.6420, with a volume of 5,881,504 shares changing hands.

Key Stories Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Nvidia’s RTX Spark and related AI PC announcements highlight Arm-based designs in next-generation PCs and data centers, supporting the view that Arm can win more content as AI adoption expands. Nvidia jumps into PCs with new Arm-based chip debuting in laptops from Microsoft, Dell, HP
• Positive Sentiment: Arm said ByteDance and Oracle are users of its AI data center CPUs, adding evidence that major customers are adopting its newer AI infrastructure products. Arm names ByteDance and Oracle as users of its AI data centre CPUs
• Positive Sentiment: Reports that stronger AI demand could pull forward Arm’s $15 billion chip target suggest the company’s own-chip strategy may ramp faster than expected. Arm’s $15 Billion AI Chip Target May Arrive Early
• Positive Sentiment: Oracle’s addition to Arm’s AGI/AI CPU ecosystem further supports the idea that Arm is building a broader partner network around agentic AI infrastructure. Oracle joins Arm’s AGI CPU ecosystem as agentic AI boom draws Meta, OpenAI and ByteDance
• Neutral Sentiment: CEO comments that the U.S. would have difficulty banning AI CPU exports to China were more of a policy observation than a direct business update, though they may imply less near-term export risk than feared. Arm Holdings CEO says US would have difficulty banning AI CPU chip exports to China
• Neutral Sentiment: An insider sale by William Abbey was disclosed, but it appears small relative to the stock’s AI-driven momentum and does not look like the main catalyst. Insider Selling: ARM insider sells 4,200 shares of stock
• Negative Sentiment: One commentary warned that some AI leaders may be getting “priced to perfection,” which could reflect broader valuation caution around richly valued AI stocks like Arm. Priced to Perfection? Select AI Stocks Set Up Climax Tops

Analyst Ratings Changes

ARM has been the topic of a number of research reports. Barclays boosted their price objective on ARM from $250.00 to $360.00 and gave the company an “overweight” rating in a research note on Monday. Weiss Ratings restated a “hold (c)” rating on shares of ARM in a research note on Monday, April 20th. Guggenheim boosted their price objective on ARM from $240.00 to $255.00 and gave the company a “buy” rating in a research note on Thursday, May 7th. TD Cowen boosted their price objective on ARM from $165.00 to $265.00 and gave the company a “buy” rating in a research note on Thursday, May 7th. Finally, JPMorgan Chase & Co. lowered their price objective on ARM from $180.00 to $145.00 and set an “overweight” rating on the stock in a research note on Thursday, February 5th. Twenty equities research analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $226.92.

ARM Trading Down 1.5%

The firm has a market cap of $425.47 billion, a PE ratio of 479.42, a price-to-earnings-growth ratio of 14.85 and a beta of 3.78. The stock has a fifty day simple moving average of $204.85 and a two-hundred day simple moving average of $151.19.

ARM (NASDAQ:ARM) last posted its earnings results on Wednesday, April 1st. The company reported $0.60 earnings per share for the quarter. The business had revenue of $1.49 billion during the quarter. ARM had a return on equity of 12.43% and a net margin of 18.37%. As a group, sell-side analysts predict that ARM Holdings PLC Sponsored ADR will post 1.12 earnings per share for the current fiscal year.

Insider Buying and Selling at ARM

In other ARM news, CFO Jason Child sold 31,920 shares of ARM stock in a transaction dated Wednesday, May 20th. The stock was sold at an average price of $226.54, for a total transaction of $7,231,156.80. Following the completion of the transaction, the chief financial officer owned 174,232 shares of the company’s stock, valued at $39,470,517.28. The trade was a 15.48% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider William Abbey sold 10,887 shares of ARM stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $224.14, for a total value of $2,440,212.18. Following the transaction, the insider directly owned 43,353 shares of the company’s stock, valued at $9,717,141.42. The trade was a 20.07% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 283,466 shares of company stock worth $58,946,033.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently modified their holdings of the business. GKV Capital Management Co. Inc. purchased a new position in shares of ARM during the first quarter worth about $106,000. CTC Alternative Strategies Ltd. purchased a new position in shares of ARM during the first quarter worth about $2,322,000. BankChampaign National Association purchased a new position in shares of ARM during the first quarter worth about $510,000. Groupe la Francaise grew its holdings in shares of ARM by 62.9% during the first quarter. Groupe la Francaise now owns 41,953 shares of the company’s stock worth $6,309,000 after purchasing an additional 16,201 shares in the last quarter. Finally, Liontrust Investment Partners LLP grew its holdings in shares of ARM by 139.7% during the first quarter. Liontrust Investment Partners LLP now owns 347,339 shares of the company’s stock worth $52,545,000 after purchasing an additional 202,410 shares in the last quarter. Hedge funds and other institutional investors own 7.53% of the company’s stock.

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.