Shares of Arm Holdings look poised to surge another 35%, according to Rosenblatt.
Analyst Hans Mosesmann hiked the firm’s price target to $180 a share, citing improving royalty trends and the company’s “impressive” compute subsystem program which is a “mid-single digit royalty rate adder.”
“We happened to be in Cambridge recently and came away with increased conviction that royalty trends are richening at a faster clip on the heels of more strategic licensing engagements that are increasingly AI-centric,” Mosesmann wrote.
Given this strong growth outlook, the firm expects Arm’s earnings power to exceed $3 a share in 2026. This also warrants a 50 times price-to-earnings multiple, he added.
“We see ARM’s P/E multiple supportive of 50%+ levels given secular and royalty shifts we see at ~10% by end of decade if not sooner,” he wrote. “Like Nvidia in compute GPUs, Arm’s technology is becoming indispensable and more so as AI moves more and more to the Edge.”
Arm shares rallied another 10.2% in morning trading and have surged 77% since the start of the year.
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