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

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

ARM News Summary

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

Analysts Set New Price Targets

Several research firms have recently weighed in on ARM. Sanford C. Bernstein set a $500.00 price target on ARM in a research note on Wednesday, June 17th. UBS Group dropped their price objective on ARM from $360.00 to $320.00 and set a “buy” rating on the stock in a research report on Thursday, July 30th. HSBC lowered ARM from a “buy” rating to a “hold” rating and boosted their target price for the stock from $255.00 to $315.00 in a research report on Tuesday, July 14th. Rosenblatt Securities lowered their target price on shares of ARM from $270.00 to $250.00 and set a “buy” rating on the stock in a research note on Friday, July 31st. Finally, Benchmark initiated coverage on shares of ARM in a research note on Thursday, July 16th. They issued a “hold” rating for the company. One analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the company has an average rating of “Moderate Buy” and an average price target of $303.32.

ARM Price Performance

The firm has a 50-day simple moving average of $264.31 and a 200-day simple moving average of $256.24. The firm has a market capitalization 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 released its quarterly earnings results on Thursday, July 30th. The company reported $0.45 EPS for the quarter, beating the consensus estimate of $0.40 by $0.05. The firm had revenue of $1.29 billion during the quarter, compared to analyst estimates of $1.26 billion. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business’s revenue for the quarter was up 22.4% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.35 EPS. Equities analysts expect that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current year.

Insider Activity at ARM

In related news, CFO Jason Child sold 10,400 shares of the firm’s stock in a transaction on Monday, September 21st. The stock was 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 of the company’s stock, valued at approximately $46,032,600. This trade represents a 6.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

A number of hedge funds and other institutional investors have recently bought and sold shares of the stock. QRG Capital Management Inc. lifted its position in shares of ARM by 32.1% during the 2nd quarter. QRG Capital Management Inc. now owns 9,591 shares of the company’s stock valued at $3,401,000 after buying an additional 2,330 shares in the last quarter. Envestnet Portfolio Solutions Inc. bought a new stake in ARM during the 2nd quarter worth approximately $2,755,000. IKE Capital LLC raised its stake in ARM by 88.7% during the 2nd quarter. IKE Capital LLC now owns 5,331 shares of the company’s stock worth $1,890,000 after acquiring an additional 2,506 shares during the period. Capstone Financial Advisors Inc. purchased a new position in ARM during the second quarter valued at approximately $308,000. Finally, MCF Advisors LLC boosted its position in shares of ARM by 11.7% in the second quarter. MCF Advisors LLC now owns 764 shares of the company’s stock worth $271,000 after purchasing an additional 80 shares during the period. Hedge funds and other institutional investors own 7.53% of the company’s stock.

ARM Company Profile

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.