Arm Holdings Expected to Rise 67% in 2026 Driven by AI Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Source: Fool
- Market Outlook Positive: In the first two weeks of 2026, the S&P 500 index rose by 1.5%, with Goldman Sachs analysts predicting a fourth consecutive year of gains, driven by a resilient economy and AI infrastructure spending, expecting a 12% increase.
- Tech Stocks Lead: Large hyperscalers increased capital spending by 70% last year and are expected to continue at healthy double-digit rates in 2026, keeping investors bullish on the tech sector, with the Nasdaq-100 index already up 3%.
- Arm Holdings Growth Potential: Despite a 40% drop in Arm's stock in December 2025 due to high valuation concerns, the company reported impressive revenue growth of 34% and earnings growth of 30% in Q2, indicating strong market demand.
- Analysts Optimistic on Future: Arm's forward P/E ratio of 47 suggests significant earnings acceleration, with a median price target of $180 from 41 analysts indicating a potential 67% upside, reflecting expectations of surpassing Wall Street's growth forecasts.
Analyst Views on ARM
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
14 Buy
4 Hold
2 Sell
Moderate Buy
Current: 105.110
Low
120.00
Averages
173.44
High
215.00
Current: 105.110
Low
120.00
Averages
173.44
High
215.00
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.
