ARM (NASDAQ:ARM) Trading Up 3.9% – Still a Buy?

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) rose 3.9% during trading on Wednesday . The company traded as high as $253.00 and last traded at $251.06. Approximately 3,809,218 shares changed hands during mid-day trading, a decline of 53% from the average session volume of 8,118,830 shares. The stock had previously closed at $241.56.

More ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Microsoft highlighted progress for Windows on Arm: The platform now supports roughly 7,000 applications, gaming and broader workloads, suggesting improving software compatibility could drive demand for Arm-based PCs and strengthen the architecture’s ecosystem. Windows on Arm milestone Microsoft touts Windows on Arm
• Positive Sentiment: IBM is bringing Arm architecture into its mainframes. Native dual-architecture execution without emulation could expand Arm’s presence in enterprise computing and create additional royalty opportunities for ARM, reinforcing the company’s role as a foundational semiconductor intellectual-property provider. IBM brings Arm inside the mainframe IBM opens mainframes to Arm
• Positive Sentiment: One market commentary assigned a $272 price target, arguing that Arm can collect royalties from a broad range of expanding computing markets, including AI systems and accelerators. Arm $272 price target
• Neutral Sentiment: Articles discussing Arm’s push to develop a processor for artificial general intelligence highlight a potentially large opportunity, but the strategy is longer-term and does not yet provide a specific near-term earnings catalyst. Arm’s AGI CPU strategy
• Negative Sentiment: Valuation remains the main concern. Analysts note that ARM trades at more than 93 times earnings while management targets approximately 21% revenue growth and 23% adjusted EPS growth, leaving little room for execution disappointments. Arm valuation analysis

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on ARM shares. Sanford C. Bernstein set a $500.00 target price on ARM in a research note on Wednesday, June 17th. Benchmark began coverage on ARM in a research note on Thursday, July 16th. They issued a “hold” rating on the stock. New Street Research raised ARM from a “neutral” rating to a “buy” rating and set a $260.00 price target for the company in a report on Thursday, July 30th. Wells Fargo & Company lowered their price objective on ARM from $350.00 to $280.00 and set an “overweight” rating for the company in a research note on Thursday, July 30th. Finally, Deutsche Bank Aktiengesellschaft restated a “hold” rating on shares of ARM in a report on Thursday, May 7th. Eighteen analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and an average target price of $305.12.

ARM Trading Up 3.9%

The company has a market cap of $268.15 billion, a P/E ratio of 258.83, a P/E/G ratio of 7.08 and a beta of 3.90. The company’s 50-day moving average price is $296.43 and its two-hundred day moving average price is $232.09.

ARM (NASDAQ:ARM) last issued its quarterly earnings results on Thursday, July 30th. The company reported $0.45 EPS for the quarter, topping the consensus estimate of $0.40 by $0.05. The business 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 company’s quarterly revenue was up 22.4% compared to the same quarter last year. During the same quarter last year, the company posted $0.35 earnings per share. As a group, analysts anticipate that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current year.

Insider Activity at ARM

In other ARM news, CAO Laura Kathleen Bartels sold 11,306 shares of the stock in a transaction that occurred on Tuesday, June 2nd. The stock was sold at an average price of $392.70, for a total transaction of $4,439,866.20. Following the transaction, the chief accounting officer owned 12,135 shares of the company’s stock, valued at $4,765,414.50. This trade represents a 48.23% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider William Abbey sold 6,566 shares of ARM stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $402.72, for a total value of $2,644,259.52. Following the completion of the transaction, the insider owned 20,563 shares of the company’s stock, valued at approximately $8,281,131.36. The trade was a 24.20% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 22,072 shares of company stock worth $8,528,128 in the last 90 days.

Hedge Funds Weigh In On ARM

A number of hedge funds have recently added to or reduced their stakes in the business. Azimuth Capital Investment Management LLC bought a new stake in ARM during the second quarter valued at $8,795,000. William John Sempolinski bought a new position in shares of ARM in the 2nd quarter worth about $639,000. Raiffeisen Bank International AG bought a new position in shares of ARM in the 2nd quarter worth about $610,000. Knollwood Investment Advisory LLC acquired a new position in shares of ARM in the 2nd quarter valued at about $232,000. Finally, TD Waterhouse Canada Inc. boosted its holdings in shares of ARM by 0.5% in the 2nd quarter. TD Waterhouse Canada Inc. now owns 18,674 shares of the company’s stock valued at $6,309,000 after buying an additional 102 shares during the period. Institutional investors and hedge funds own 7.53% of the company’s stock.

ARM Company Profile

Arm Holdings (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.