Stock Price & Analysis

Buy ARM stock as it shows strong growth prospects with increasing royalty revenue and a solid position in the AI market, despite its high valuation.

The price prediction for ARM stock in 2025 is expected to reach $180, with a range of $155 to $225. This forecast is based on analyst consensus, driven by ARM's leadership in CPU architecture licensing, strong royalty revenue growth, and strategic positioning in the AI semiconductor market.

The S1 support level for ARM Stock is $104.84 ,The R1 resistant level for ARM Stock is $123.86.

As of the end of day on 2025-04-01, the price of ARM Stock was $107.03.

The target price for ARM Stock according to analyst rating is 179.00, with the highest price target at 215.00 and the lowest at 100.00. Analysts have a Moderate Buy rating on ARM Stock overall.

The market cap of ARM is $112.8B.

Analysis and Insights

ARM Holdings (ARM.O) appears overvalued based on its current valuation metrics and market position. Here's a concise analysis:

1. High Valuation Metrics: ARM's price-to-earnings (P/E) ratio of 40.83 and EV/EBITDA of 480.08 are significantly higher than industry averages, indicating a premium valuation.

2. Revenue Growth vs. Valuation: While ARM's royalty revenue grew 23% in Q3, its P/S ratio of 49.03 suggests investors are paying a high price for each dollar of revenue, reflecting elevated expectations.

3. Technical Indicators: ARM's stock is trading below its 50-day and 200-day moving averages, with a bearish MACD crossover, signaling near-term weakness.

4. Analyst Sentiment: Despite a "Strong Buy" consensus, the stock's forward P/E of 99x reflects high expectations, which may not be sustainable if growth slows.

5. Strategic Risks: ARM's move into designing its own chips risks competing with its customers, potentially alienating key partners.

Conclusion

ARM's high valuation, bearish technical indicators, and strategic risks suggest it may be overvalued. Investors should wait for a pullback or clearer signs of sustained growth before buying.

Arm Holdings plc is a semiconductor intellectual property (IP) company. The Company develops and licenses IP for various devices worldwide, and it provides development tools that accelerate product development, from sensors to smartphones to servers. Its central processing unit (CPUs) and nomenclature for properties and units (NPUs) include Cortex-A, Cortex-M, Cortex-R, Neoverse, Ethos and SecurCore. It provides processor IP, offering a range of cores to address the performance, power and cost requirements of every device, from Internet of things sensors to supercomputers, and from smartphones and laptops to autonomous vehicles. Its graphics and camera technology drives the visual experience across a range of devices, including mass-market to high-performance smartphones, Android OS-based tablets, and digital televisions. It provides foundation physical IP and processor implementation solutions to address the performance, power and cost requirements for all application markets.

Price Prediction for ARM Stock by 2030

Based on current trends and analysis, ARM stock is predicted to reach $250 by 2030. This forecast is driven by its strong position in AI-driven technologies, increasing royalty revenue from its V9 architecture, and growing demand for energy-efficient chips in AI applications.

ARM has a total of 5963 employees.