<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>Arm unveiled its AGI CPU, the company's first crack at physical silicon.</li><li>Wall Street applauded the move, bidding up the stock's price target.</li><li>Management estimates suggest the stock is vastly underpriced, particularly given the magnitude of the opportunity. </li><li>10 stocks we like better than Arm Holdings ›</li></ul>Shares of Arm Holdings (NASDAQ: ARM) bounded higher in March, gaining as much as 18.7%, according to data supplied by S&amp;P Global Market Intelligence.The catalyst that sent the semiconductor specialist higher was the development of Arm's very first in-house production artificial intelligence (AI) chip and the ensuing reaction from Wall Street.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NDM3Ny9hcm0tdG1mLnBuZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NDM3Ny9hcm0tdG1mLnBuZyZ3PTcwMA"/>Image source: The Motley Fool. <h2>The dawn of a new era</h2>Arm has been at the forefront of semiconductor design for decades, licensing the blueprints for a vast array of chips used in smart TVs, personal computers, and smartphones. More recently, the company has been instrumental in designing processors used in cloud computing, hyperscale computing, data centers, and AI. This is, however, the first time Arm has created its own in-house silicon. While the move has been long rumored in the industry, it was met with cheers from investors.Unveiled at an event in San Francisco last month, the Arm AGI CPU is &#34;the first production silicon from Arm, designed for AI infrastructure at scale.&#34; The company noted the processor was created and &#34;ruthlessly optimized&#34; for running AI inference in data centers, according to cloud AI chief Mohamed Awad. The processor sports up to 64 CPUs and roughly 8,700 cores, which produce &#34;two times the performance-per-watt than you can [get] from an x86 rack,&#34; Awad noted. &#34;That means twice as much performance in the same footprint, in the same power.&#34; He also said Arm's architecture is &#34;super-efficient,&#34; using significantly less energy than competing CPUs at a time when the industry is focused on reducing power consumption. In an interview after the unveiling, CEO Rene Haas estimated that Arm would generate $25 billion in annual revenue and earnings per share of $9 by 2031, with $15 billion in sales from the Arm AGI CPU. For context, the company is expected to generate $4.9 billion in sales in fiscal 2026 (ended March 31), so this forecast, if accurate, will take Arm's financial results to the next level. Wall Street's finest scrambled to update their financial models and estimates on the heels of this revelation and widely applauded Arm's strategic pivot. Guggenheim analyst John Difucci maintained his buy rating on the stock and raised his price target to a Street-high $240. For those keeping score at home, that represents potential upside for investors of 61% compared to Monday's closing price. Difucci noted that &#34;we are confident in the company's ability to execute,&#34; calling Arm's move &#34;transformational.&#34; He also acknowledged the potential risk involved in &#34;launching a new opportunity,&#34; and will continue to monitor the company's execution.Arm isn't cheap, selling for 49 times next year's expected sales. However, assuming management's estimates are correct, the stock is selling for less than 17 times estimated 2031 earnings. When viewed in that light, this could represent a compelling opportunity to pick up shares of Arm for an attractive price.<h2>Should you buy stock in Arm Holdings right now?</h2> Before you buy stock in Arm Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $533,522!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,089,028!* Now, it’s worth noting Stock Advisor’s total average return is 930% — a market-crushing outperformance compared to 185% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 7, 2026. Danny Vena, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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Arm Holdings' stock surged 18.7% in March following the unveiling of its first in-house AI chip, the AGI CPU, which is designed for data centers. Wall Street responded positively, with analysts raising price targets, including Guggenheim's to $240, indicating a potential 61% upside. CEO Rene Haas projected $25 billion in annual revenue by 2031, driven by the new chip. Despite a high current valuation, the stock may be undervalued based on future earnings estimates. However, it was not included in a list of top stock recommendations by The Motley Fool.

- Arm Holdings unveiled its first in-house AGI CPU, aimed at optimizing AI infrastructure for data centers, which led to an 18.7% stock price increase in March.  
- Management projects annual revenues of $25 billion by 2031, supported by significant demand for the new chip, despite the stock currently being valued at 49 times expected sales for the next year.  
- Analysts, including Guggenheim's John Difucci, have raised price targets significantly, viewing Arm's strategic pivot as a transformational opportunity, while also noting potential risks in execution.

Why Arm Holdings Stock Skyrocketed 18% in March