Arm Launches Its First In-House Silicon Chip
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy ARM?
Source: NASDAQ.COM
- Chip Launch: Arm unveiled its first in-house designed chip, the Arm AGI CPU, in San Francisco, marking a significant pivot into physical silicon production, which is expected to enhance its competitiveness in the AI infrastructure market.
- Strategic Partnership: Meta Platforms serves as the lead partner in co-developing the Arm AGI CPU and will be its first large-scale user, fostering close collaboration on multiple future generations of the chip, thereby strengthening their market positions.
- Impressive Customer Base: Initial customers for the Arm AGI CPU include notable companies such as Cloudflare, F5, OpenAI, SAP, and SK Telecom, which will help Arm secure a foothold in the rapidly growing AI CPU market projected to reach $1 trillion.
- Significant Market Potential: Arm has shipped over 350 billion chips based on its architecture, and with a forward price/earnings-to-growth (PEG) ratio of 0.57, it indicates potential undervaluation, suggesting significant growth opportunities through its new business venture.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ARM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on ARM
Wall Street analysts forecast ARM stock price to rise
24 Analyst Rating
19 Buy
4 Hold
1 Sell
Strong Buy
Current: 144.130
Low
120.00
Averages
160.58
High
201.00
Current: 144.130
Low
120.00
Averages
160.58
High
201.00
About ARM
Arm Holdings plc is engaged in operating a global computing platform. It architects, develops, and licenses high-performance and energy-efficient Arm compute platforms. The Company’s principal operations and activities are the licensing, marketing, research and development of central processing unit (CPU) design intellectual property (IP), graphics processors, system IP, market optimized platform IP, and associated software, tools and other related services. Its complementary products include GPU and NPU accelerators, interconnect, and others. Its primary product offerings are CPU products that address diverse performance, power, and cost requirements. It offers a family of GPU and NPU products providing efficient computing acceleration and an optimal visual experience across a wide range of devices. Its CPU, GPU, and System IP products integrated into a foundational compute platform optimized for a specific end market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Mixed U.S. Stock Indices Amid Rising Oil Prices
- Mixed Stock Performance: The S&P 500 Index fell by 0.29%, while the Dow Jones Industrial Average rose by 0.26%, and the Nasdaq 100 Index decreased by 0.67%, indicating a complex market reaction to Federal Reserve policies and international tensions.
- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to disruptions in oil and gas flows through the Strait of Hormuz caused by the Iran conflict, which could negatively impact global economic growth.
- Weak Manufacturing Activity: The Dallas Fed manufacturing activity index dropped from -0.4 to -0.2, falling short of the expected increase to 2.0, suggesting challenges in economic recovery that may influence future policy decisions.
- Escalating International Tensions: U.S. and Israeli military actions against Iran have intensified, with 3,500 sailors and Marines deployed to the Middle East, potentially leading to further volatility in energy markets and impacting global supply chains.
See More
US Stocks Rise as Oil Prices Hit Three-Week High
- Market Gains: The S&P 500 Index rose by 0.58%, the Dow Jones Industrial Average increased by 0.91%, and the Nasdaq 100 Index climbed by 0.30%, reflecting a positive market sentiment amid expectations that the Fed may keep interest rates unchanged.
- Declining Bond Yields: The 10-year Treasury note yield fell by 10 basis points to 4.33%, driven by concerns that the ongoing war in the Middle East could lead to a fuel shortage, potentially hindering global economic growth and influencing the Fed's future rate decisions.
- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to Iranian attacks on shipping, raising fears that the closure of the Strait of Hormuz could disrupt global oil and gas supplies, which may lead to significant price increases.
- Manufacturing Activity Decline: The Dallas Fed's manufacturing activity survey dropped by 0.4 to -0.2, falling short of the expected increase to 2.0, indicating signs of economic slowdown that could impact future investment decisions.
See More
Meta Stock Faces Challenges This Year, Yet Morgan Stanley Names It a 'Top Pick'.
- Meta Platforms' Q1 2026 Performance: The first quarter of 2026 was challenging for Meta Platforms, impacting its financial results.
- Shareholder Impact: The difficulties faced by Meta also had negative repercussions for its shareholders.
See More
Arm Holdings Enters Chipmaking with AGI CPU Launch
- Revenue Growth Forecast: Arm Holdings anticipates that its newly launched Arm AGI CPU will drive annual revenue to $15 billion by fiscal 2031, representing over fivefold growth from its current $1.2 billion, indicating strong demand and potential profitability in the AI market.
- Market Share Expansion: The Arm AGI CPU is specifically optimized for AI operations in data centers, featuring 64 CPUs and 8,700 cores, and has already attracted interest from tech giants like Meta and Cloudflare, showcasing its competitive edge in high-performance computing.
- Stock Price Potential: With Arm's current stock price around $157, if it achieves an EPS of $9 in fiscal 2031, applying a conservative P/E ratio of 73 could see the stock soar to $657, reflecting a 318% increase and indicating investor optimism about its future growth.
- R&D Investment Returns: Arm's significant investment in R&D is paying off, with a 26% year-over-year revenue increase in Q3 and a gross margin exceeding 97%, laying a solid foundation for its future chip manufacturing business and enhancing its market competitiveness.
See More
Arm Holdings Stock Surges 200% Post-IPO with Ambitious Growth Plans
- Strong IPO Performance: Arm Holdings went public on September 14, 2023, and its stock has surged over 200% since then, significantly outpacing the S&P 500's 45% gain during the same period, indicating strong market confidence in its growth potential.
- Robust Revenue Growth: In the third quarter of fiscal 2026, Arm generated $1.2 billion in revenue, a 26% year-over-year increase, with a gross margin exceeding 97%, showcasing solid financial performance despite high R&D expenditures that limited adjusted EPS growth to 10%.
- AI Chip Launch: Arm announced the debut of its AGI CPU, designed specifically for data centers and featuring 64 CPUs with 8,700 cores, which is expected to drive annual revenue growth to $15 billion over the next five years, highlighting its competitive strength in the AI sector.
- Optimistic Future Outlook: Management forecasts total revenue of $25 billion by fiscal 2031, with an EPS target of $9, suggesting a potential stock price increase of 318% to $657, reflecting the market's optimistic expectations for its long-term growth trajectory.
See More
Arm Projects $25 Billion Revenue by FY2031 with New AI Chip Launch
- Financial Outlook: Arm projects a revenue of $25 billion by FY2031, a significant increase from $5 billion this year, with expected earnings per share rising from $1.78 to $9, indicating strong earnings potential in a rapidly growing market.
- Chip Launch: Arm announced the launch of its first in-house chip, the Arm AGI CPU, designed for AI data centers, with Meta as the lead partner and co-developer, marking a major shift from being an intellectual property provider to a chip manufacturer.
- Market Reaction: Despite a 1.2% drop in ARM shares during Friday's post-market hours, analysts have set an average 12-month price target of $164.73, suggesting about a 14% upside, reflecting a positive sentiment towards the company's future prospects.
- Investment Rating: Seaport Research Partners has assigned a price target of $185 on ARM shares with a ‘Buy’ rating, noting that while there are risks, the company presents a highly compelling opportunity to significantly enhance its earnings power in a fast-growing market.
See More
Mixed U.S. Stock Indices Amid Rising Oil Prices
- Mixed Stock Performance: The S&P 500 Index fell by 0.29%, while the Dow Jones Industrial Average rose by 0.26%, and the Nasdaq 100 Index decreased by 0.67%, indicating a complex market reaction to Federal Reserve policies and international tensions.
- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to disruptions in oil and gas flows through the Strait of Hormuz caused by the Iran conflict, which could negatively impact global economic growth.
- Weak Manufacturing Activity: The Dallas Fed manufacturing activity index dropped from -0.4 to -0.2, falling short of the expected increase to 2.0, suggesting challenges in economic recovery that may influence future policy decisions.
- Escalating International Tensions: U.S. and Israeli military actions against Iran have intensified, with 3,500 sailors and Marines deployed to the Middle East, potentially leading to further volatility in energy markets and impacting global supply chains.
See More
US Stocks Rise as Oil Prices Hit Three-Week High
- Market Gains: The S&P 500 Index rose by 0.58%, the Dow Jones Industrial Average increased by 0.91%, and the Nasdaq 100 Index climbed by 0.30%, reflecting a positive market sentiment amid expectations that the Fed may keep interest rates unchanged.
- Declining Bond Yields: The 10-year Treasury note yield fell by 10 basis points to 4.33%, driven by concerns that the ongoing war in the Middle East could lead to a fuel shortage, potentially hindering global economic growth and influencing the Fed's future rate decisions.
- Rising Oil Prices: Crude oil prices surged over 2% to a three-week high due to Iranian attacks on shipping, raising fears that the closure of the Strait of Hormuz could disrupt global oil and gas supplies, which may lead to significant price increases.
- Manufacturing Activity Decline: The Dallas Fed's manufacturing activity survey dropped by 0.4 to -0.2, falling short of the expected increase to 2.0, indicating signs of economic slowdown that could impact future investment decisions.
See More
Meta Stock Faces Challenges This Year, Yet Morgan Stanley Names It a 'Top Pick'.
- Meta Platforms' Q1 2026 Performance: The first quarter of 2026 was challenging for Meta Platforms, impacting its financial results.
- Shareholder Impact: The difficulties faced by Meta also had negative repercussions for its shareholders.
See More
Arm Holdings Enters Chipmaking with AGI CPU Launch
- Revenue Growth Forecast: Arm Holdings anticipates that its newly launched Arm AGI CPU will drive annual revenue to $15 billion by fiscal 2031, representing over fivefold growth from its current $1.2 billion, indicating strong demand and potential profitability in the AI market.
- Market Share Expansion: The Arm AGI CPU is specifically optimized for AI operations in data centers, featuring 64 CPUs and 8,700 cores, and has already attracted interest from tech giants like Meta and Cloudflare, showcasing its competitive edge in high-performance computing.
- Stock Price Potential: With Arm's current stock price around $157, if it achieves an EPS of $9 in fiscal 2031, applying a conservative P/E ratio of 73 could see the stock soar to $657, reflecting a 318% increase and indicating investor optimism about its future growth.
- R&D Investment Returns: Arm's significant investment in R&D is paying off, with a 26% year-over-year revenue increase in Q3 and a gross margin exceeding 97%, laying a solid foundation for its future chip manufacturing business and enhancing its market competitiveness.
See More
Arm Holdings Stock Surges 200% Post-IPO with Ambitious Growth Plans
- Strong IPO Performance: Arm Holdings went public on September 14, 2023, and its stock has surged over 200% since then, significantly outpacing the S&P 500's 45% gain during the same period, indicating strong market confidence in its growth potential.
- Robust Revenue Growth: In the third quarter of fiscal 2026, Arm generated $1.2 billion in revenue, a 26% year-over-year increase, with a gross margin exceeding 97%, showcasing solid financial performance despite high R&D expenditures that limited adjusted EPS growth to 10%.
- AI Chip Launch: Arm announced the debut of its AGI CPU, designed specifically for data centers and featuring 64 CPUs with 8,700 cores, which is expected to drive annual revenue growth to $15 billion over the next five years, highlighting its competitive strength in the AI sector.
- Optimistic Future Outlook: Management forecasts total revenue of $25 billion by fiscal 2031, with an EPS target of $9, suggesting a potential stock price increase of 318% to $657, reflecting the market's optimistic expectations for its long-term growth trajectory.
See More
Arm Projects $25 Billion Revenue by FY2031 with New AI Chip Launch
- Financial Outlook: Arm projects a revenue of $25 billion by FY2031, a significant increase from $5 billion this year, with expected earnings per share rising from $1.78 to $9, indicating strong earnings potential in a rapidly growing market.
- Chip Launch: Arm announced the launch of its first in-house chip, the Arm AGI CPU, designed for AI data centers, with Meta as the lead partner and co-developer, marking a major shift from being an intellectual property provider to a chip manufacturer.
- Market Reaction: Despite a 1.2% drop in ARM shares during Friday's post-market hours, analysts have set an average 12-month price target of $164.73, suggesting about a 14% upside, reflecting a positive sentiment towards the company's future prospects.
- Investment Rating: Seaport Research Partners has assigned a price target of $185 on ARM shares with a ‘Buy’ rating, noting that while there are risks, the company presents a highly compelling opportunity to significantly enhance its earnings power in a fast-growing market.
See More
