Arm Holdings PLC's stock fell 3.01% as it hit a 20-day low amid broader market declines, with the Nasdaq-100 down 0.16% and the S&P 500 down 0.25%.
The recent downgrade by BofA from Buy to Neutral, along with a lowered price target from $145 to $120, reflects concerns over Arm's near-term challenges in the smartphone market, where unit sales are expected to decline. Analysts highlighted that over 50% of Arm's royalty sales come from this segment, which could impact revenue significantly. Additionally, increased reliance on SoftBank for licensing revenue raises further concerns about financial stability.
This downgrade adds to the negative sentiment surrounding Arm, which has already faced stock volatility and financing risks. Investors will be closely watching the upcoming earnings report for further insights into the company's performance and outlook.
Wall Street analysts forecast ARM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARM is 173.44 USD with a low forecast of 120.00 USD and a high forecast of 215.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
Wall Street analysts forecast ARM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARM is 173.44 USD with a low forecast of 120.00 USD and a high forecast of 215.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Buy
4 Hold
2 Sell
Moderate Buy
Current: 108.430
Low
120.00
Averages
173.44
High
215.00
Current: 108.430
Low
120.00
Averages
173.44
High
215.00
UBS
Buy
to
Buy
downgrade
$195 -> $175
2026-01-26
New
Reason
UBS
Price Target
$195 -> $175
AI Analysis
2026-01-26
New
downgrade
Buy
to
Buy
Reason
UBS lowered the firm's price target on Arm to $175 from $195 and keeps a Buy rating on the shares.
Wells Fargo
Overweight
downgrade
$195 -> $160
2026-01-26
New
Reason
Wells Fargo
Price Target
$195 -> $160
2026-01-26
New
downgrade
Overweight
Reason
Wells Fargo lowered the firm's price target on Arm to $160 from $195 and keeps an Overweight rating on the shares. While the firm remains positive on Arm's long-term position to benefit from emerging AI opportunities, Wells thinks forward estimates require a reset. The firm is lowering 2027 / 2028 estimate and believes 2027 Street Royalty revenue estimates are too high at positive 27% year-over-year.
Unlock Full Analyst Thesis， Get the complete breakdown of rating reason for ARM
Unlock Now
Susquehanna
Neutral -> Positive
upgrade
$150
2026-01-21
Reason
Susquehanna
Price Target
$150
2026-01-21
upgrade
Neutral -> Positive
Reason
As previously reported, Susquehanna upgraded Arm to Positive from Neutral with an unchanged price target of $150. Recent sell-side competitor downgrades and the significant underperformance of the stock offer "an excellent setup," the analyst tells investors. Investor worries about the effects of higher memory prices on the mobile and PC markets have pressured shares, but the firm views this selloff "opportunistically" as it contrasts well-known market weakness with the potential of two important, data center-related and significant "company-changing" initiatives, namely the development of an AI XPU ASIC and a custom server CPU.
Susquehanna
Neutral -> Positive
upgrade
$150
2026-01-21
Reason
Susquehanna
Price Target
$150
2026-01-21
upgrade
Neutral -> Positive
Reason
Susquehanna upgraded Arm to Positive from Neutral with a $150 price target.
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.
