Nikkei jumps 3%, leading Asia-Pacific markets higher
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 11 2024
0mins
Should l Buy ARM?
Source: CNBC
Market Performance: Asia-Pacific markets opened higher, influenced by Wall Street gains, with Japan's Nikkei 225 rising 3% and significant increases in Asian chipmakers following positive comments from Nvidia's CEO about AI chip demand.
Economic Indicators: Japan's producer price index rose 2.5% year-on-year, below expectations, while investors await consumer price index data from India and Hong Kong's producer price index release, which could impact future interest rate decisions.
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 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: 123.700
Low
120.00
Averages
173.44
High
215.00
Current: 123.700
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.
Arm Holdings Misunderstood by Market Dynamics
- Unique Business Model: Arm Holdings licenses its CPU designs and earns royalties from sales, and while concerns about declining production in the smartphone sector have spooked investors, its actual exposure is less than perceived, demonstrating the resilience of its business model.
- Surge in R&D Spending: Arm's R&D expenditure jumped 46% on a non-GAAP basis to $512 million, reflecting significant investment in new solutions like edge AI and physical AI, indicating strong future growth potential.
- Rapid Data Center Growth: Arm's revenue from data centers more than doubled year-over-year, and it expects to capture 50% of the CPU market share among top hyperscalers by year-end, showcasing its growth potential in this massive market.
- Valuation Risks: Despite a 26% revenue growth in Q3, Arm's stock trades at a price-to-earnings ratio of around 60, suggesting high market expectations, which necessitates careful evaluation of its growth potential relative to its current valuation.
See More
US Stocks Dip Slightly as Tech Shares Retreat
- Tech Stock Retreat: Technology stocks are broadly down today, contributing to a 0.03% decline in the S&P 500, a 0.34% drop in the Dow Jones, and a 0.17% decrease in the Nasdaq 100, reflecting a cautious investor sentiment following last Friday's sharp gains.
- Bond Yield Pressure: Rising US bond yields, with the 10-year T-note yield up 2 basis points to 4.22%, are exacerbated by Chinese regulators instructing banks to reduce their US debt holdings, reviving concerns over the haven status of US assets and potentially impacting investor confidence.
- Earnings Season Insights: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating resilience in corporate earnings and potential market support.
- Economic Data Focus: The market is set to focus on upcoming economic data, including a projected 0.8% increase in the employment cost index on Tuesday and a 2.5% year-over-year rise in the consumer price index on Friday, which will provide guidance on future economic trends.
See More
Future Prospects for Semiconductors: Technical Signals Indicate Potential Gains for Three Stocks.
Technology Sector Performance: The technology sector saw a 4% surge on Friday, as indicated by the State Street Technology Select Sector SPDR ETF.
Weekly Closing Status: Despite the Friday surge, the ETF closed the week down 1.9%, marking its second-largest trading volume in nearly four years.
2026 Performance Context: Technology remains the worst-performing sector among the 11 S&P sectors in 2026, with a decline of 2%.
Market Trends: The fluctuations highlight ongoing volatility and challenges within the technology sector amidst broader market conditions.
See More
Federal Judge Orders Elon Musk to Testify in USAID Case
- Musk Ordered to Testify: A federal judge has ruled that Elon Musk must testify regarding his role in dismantling USAID, rejecting his legal team's attempt to avoid questioning, which could impact Musk's reputation and future business endeavors.
- Alphabet Beats Earnings Estimates: Alphabet reported fourth-quarter revenue of $113.83 billion, surpassing the Street consensus estimate of $111.31 billion, with earnings per share of $2.82 exceeding expectations of $2.63, indicating strong performance in advertising and cloud services that may drive stock price increases.
- Amazon Delivery Milestone: Amazon announced it delivered over 13 billion items globally in 2025, with more than 8 billion items reaching U.S. Prime members the same or next day, a speed enhancement that will further strengthen its competitive position in the e-commerce market.
- Tesla's New Model Launch: Tesla unveiled a new All-Wheel Drive variant of the Model Y in the U.S. and Puerto Rico following Elon Musk's announcement of discontinuing the Model S and X, which could attract more consumers and enhance market share.
See More
Arm's Data Center Revenue Doubles, R&D Investment Accelerates
- Significant Revenue Growth: Arm's data center revenue more than doubled year-over-year in the most recent quarter, indicating strong potential in this rapidly growing market, with expectations to capture 50% of the CPU market share among top hyperscalers by year-end.
- Increased R&D Investment: The company ramped up its R&D spending by 46% year-over-year to $512 million, reflecting Arm's commitment to investing in new areas like Edge AI and Physical AI, aiming to achieve higher royalty rates and licensing fees through new products.
- Market Reaction Volatility: Although Arm's stock initially fell after its earnings report, it rebounded during regular trading, suggesting that the market's understanding of its unique business model remains flawed, particularly against the backdrop of weakness in the smartphone sector.
- Future Growth Potential: Arm anticipates that its new products will generate higher royalty revenues, and while its current growth may not match that of other AI companies like Nvidia, its upcoming developments are still worth watching, especially in the early stages of the AI revolution.
See More
Arm Holdings Poised to Benefit from Agentic AI Wave
- Surge in Data Center Revenue: Arm Holdings reported over a 100% year-over-year increase in data center royalty revenue in Q3, indicating a rapid expansion in market share driven by rising demand for Agentic AI, with expectations that data center business will surpass mobile as the largest revenue source in the coming years.
- Rising CPU Demand: As Agentic AI gains traction, CFO Jason Child highlighted that CPUs will handle the bulk of workloads, which is expected to significantly boost CPU demand, thereby providing Arm with sustained revenue growth potential, especially as AI tools become more prevalent.
- Technological Transformation Trend: Anthropic's Claude Code is seen as a pivotal point for Agentic AI, with predictions that it will account for 20% of daily commits on GitHub by year-end, which will accelerate the development and deployment of AI agents, further enhancing Arm's technological applications and market competitiveness in this domain.
- Optimistic Market Outlook: Despite Arm's stock trading at a high price-to-earnings ratio of around 100, indicating some overvaluation, the company is expected to increase royalty rates through the introduction of new products like Armv9 and compute subsystems, enhancing profitability and fostering investor optimism about its future growth potential.
See More
Arm Holdings Misunderstood by Market Dynamics
- Unique Business Model: Arm Holdings licenses its CPU designs and earns royalties from sales, and while concerns about declining production in the smartphone sector have spooked investors, its actual exposure is less than perceived, demonstrating the resilience of its business model.
- Surge in R&D Spending: Arm's R&D expenditure jumped 46% on a non-GAAP basis to $512 million, reflecting significant investment in new solutions like edge AI and physical AI, indicating strong future growth potential.
- Rapid Data Center Growth: Arm's revenue from data centers more than doubled year-over-year, and it expects to capture 50% of the CPU market share among top hyperscalers by year-end, showcasing its growth potential in this massive market.
- Valuation Risks: Despite a 26% revenue growth in Q3, Arm's stock trades at a price-to-earnings ratio of around 60, suggesting high market expectations, which necessitates careful evaluation of its growth potential relative to its current valuation.
See More
US Stocks Dip Slightly as Tech Shares Retreat
- Tech Stock Retreat: Technology stocks are broadly down today, contributing to a 0.03% decline in the S&P 500, a 0.34% drop in the Dow Jones, and a 0.17% decrease in the Nasdaq 100, reflecting a cautious investor sentiment following last Friday's sharp gains.
- Bond Yield Pressure: Rising US bond yields, with the 10-year T-note yield up 2 basis points to 4.22%, are exacerbated by Chinese regulators instructing banks to reduce their US debt holdings, reviving concerns over the haven status of US assets and potentially impacting investor confidence.
- Earnings Season Insights: More than half of S&P 500 companies have reported earnings, with 79% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, indicating resilience in corporate earnings and potential market support.
- Economic Data Focus: The market is set to focus on upcoming economic data, including a projected 0.8% increase in the employment cost index on Tuesday and a 2.5% year-over-year rise in the consumer price index on Friday, which will provide guidance on future economic trends.
See More
Future Prospects for Semiconductors: Technical Signals Indicate Potential Gains for Three Stocks.
Technology Sector Performance: The technology sector saw a 4% surge on Friday, as indicated by the State Street Technology Select Sector SPDR ETF.
Weekly Closing Status: Despite the Friday surge, the ETF closed the week down 1.9%, marking its second-largest trading volume in nearly four years.
2026 Performance Context: Technology remains the worst-performing sector among the 11 S&P sectors in 2026, with a decline of 2%.
Market Trends: The fluctuations highlight ongoing volatility and challenges within the technology sector amidst broader market conditions.
See More
Federal Judge Orders Elon Musk to Testify in USAID Case
- Musk Ordered to Testify: A federal judge has ruled that Elon Musk must testify regarding his role in dismantling USAID, rejecting his legal team's attempt to avoid questioning, which could impact Musk's reputation and future business endeavors.
- Alphabet Beats Earnings Estimates: Alphabet reported fourth-quarter revenue of $113.83 billion, surpassing the Street consensus estimate of $111.31 billion, with earnings per share of $2.82 exceeding expectations of $2.63, indicating strong performance in advertising and cloud services that may drive stock price increases.
- Amazon Delivery Milestone: Amazon announced it delivered over 13 billion items globally in 2025, with more than 8 billion items reaching U.S. Prime members the same or next day, a speed enhancement that will further strengthen its competitive position in the e-commerce market.
- Tesla's New Model Launch: Tesla unveiled a new All-Wheel Drive variant of the Model Y in the U.S. and Puerto Rico following Elon Musk's announcement of discontinuing the Model S and X, which could attract more consumers and enhance market share.
See More
Arm's Data Center Revenue Doubles, R&D Investment Accelerates
- Significant Revenue Growth: Arm's data center revenue more than doubled year-over-year in the most recent quarter, indicating strong potential in this rapidly growing market, with expectations to capture 50% of the CPU market share among top hyperscalers by year-end.
- Increased R&D Investment: The company ramped up its R&D spending by 46% year-over-year to $512 million, reflecting Arm's commitment to investing in new areas like Edge AI and Physical AI, aiming to achieve higher royalty rates and licensing fees through new products.
- Market Reaction Volatility: Although Arm's stock initially fell after its earnings report, it rebounded during regular trading, suggesting that the market's understanding of its unique business model remains flawed, particularly against the backdrop of weakness in the smartphone sector.
- Future Growth Potential: Arm anticipates that its new products will generate higher royalty revenues, and while its current growth may not match that of other AI companies like Nvidia, its upcoming developments are still worth watching, especially in the early stages of the AI revolution.
See More
Arm Holdings Poised to Benefit from Agentic AI Wave
- Surge in Data Center Revenue: Arm Holdings reported over a 100% year-over-year increase in data center royalty revenue in Q3, indicating a rapid expansion in market share driven by rising demand for Agentic AI, with expectations that data center business will surpass mobile as the largest revenue source in the coming years.
- Rising CPU Demand: As Agentic AI gains traction, CFO Jason Child highlighted that CPUs will handle the bulk of workloads, which is expected to significantly boost CPU demand, thereby providing Arm with sustained revenue growth potential, especially as AI tools become more prevalent.
- Technological Transformation Trend: Anthropic's Claude Code is seen as a pivotal point for Agentic AI, with predictions that it will account for 20% of daily commits on GitHub by year-end, which will accelerate the development and deployment of AI agents, further enhancing Arm's technological applications and market competitiveness in this domain.
- Optimistic Market Outlook: Despite Arm's stock trading at a high price-to-earnings ratio of around 100, indicating some overvaluation, the company is expected to increase royalty rates through the introduction of new products like Armv9 and compute subsystems, enhancing profitability and fostering investor optimism about its future growth potential.
See More
