From Nasdaq: 2024-04-03 17:46:42

1. Demand for AI chips has surged, benefiting Arm Holdings Plc ADR (ARM). The company saw a 95% increase in its shares since its debut, valuing it at $54.5 billion, the largest IPO since late 2021.

2. Arm Holdings stock rose 25% on its first trading day, reaching a $65 billion valuation. The stock witnessed a 47% spike after an AI-powered Q3 earnings beat and an annual guidance raise in February.

3. Arm stock has surged 66.2% YTD, raising concerns about its overvaluation. It trades at 104x forward earnings, significantly higher than its peers.

4. Arm reported a strong Q3 performance, with total revenue increasing 14% year over year to $824 million. Licensing revenue grew 18% year over year, driven by increasing demand for AI technology.

5. Arm Holdings projects EPS between $0.28 and $0.32 for the fourth quarter of 2024, with revenue between $850 million and $900 million. Analysts expect adjusted earnings per share of $1.21 in 2024 and $1.52 in 2025.

6. Analysts have a consensus “Moderate Buy” rating on Arm Holdings stock. The average analyst price target is $92.53, with a Street-high price target of $180, suggesting potential for a 44.8% rally. Rosenblatt analyst sees Arm’s AI tech becoming indispensable.



Read more at Nasdaq: Up 66% YTD, Is Arm Holdings Stock Overvalued?