JPM Raises Arm Holdings plc TP to USD255, Says AGI CPU Revenue May Exceed USD1 billion
Complete. Here is the key summaryJPMorgan raised Arm Holdings' target price to USD255 and reiterated an 'Overweight' rating, citing strong quarterly results and raised FY2027 guidance. The broker highlights accelerating AGI CPU royalty revenue growth (22% YoY) and believes the USD1 billion revenue target for FY2027-2028 may be exceeded, despite supply chain bottlenecks. Full-year FY2027 revenue forecasts were slightly increased to USD6.05 billion.
JPM published a research report stating that Arm Holdings plc (ARM.US) 's latest quarterly results comprehensively beat market expectations, while management slightly raised full-year guidance for FY2027. Development of the artificial general intelligence (AGI) commercial silicon CPU business continued to strengthen, with royalty revenue growth re-accelerating to 22% YoY during the period.
The broker believes the key focus this quarter was the development of the AGI CPU business. Management has initially outlined expectations for related revenue to reach USD1 billion in FY2027-FY2028, adding that current customer demand already far exceeds USD2 billion. However, supply chain segments including wafers, substrates, testing capacity and memory remain bottlenecks.
The broker believes there may be upside potential to the USD1 billion revenue target and expects management to provide further updates when FY2027 third-quarter results are announced. It currently forecasts full-year FY2027 revenue at USD6.05 billion, with estimates slightly raised to reflect upgrades in the licensing business and continued AGI CPU momentum. The TP was raised from USD240 to USD255, with the "Overweight" rating reiterated. (gc/u)(Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)