AI-Related Stock Prediction: One Analyst on Wall Street Believes Arm Holdings Could Reach $160
AI-Related Stock Prediction: One Analyst on Wall Street Believes Arm Holdings Could Reach $160
The AI stock craze, while it's had a slight lull lately, has been a long-term trend that's been gaining momentum for about two years now. Investors are eager to hop on this trend, convinced that AI is on the verge of becoming omnipresent. One such stock that's been catching the eye of many is ARM Holdings, a U.K.-based company.
Recently, a professional researcher joined the bandwagon of investors who believe in ARM's potential. This particular researcher, hailing from Swiss banking giant UBS Group, has given ARM a thumbs up, suggesting it's a buy. Their price target for the stock stands at an impressive $160 per share, which is 17% higher than its current valuation.
Bullish on ARM
This new bull, Timothy Arcuri, believes that AI is the driving force behind growth in all of ARM's end markets, especially the data center segment. Even in the smartphone market, where ARM already has significant presence, Arcuri predicts a compound annual growth rate (CAGR) of 23% from 2023 to 2025.
While acknowledging that ARM is quite expensive based on its valuations, Arcuri points out that stocks with immense potential tend to be costly. That's why he thinks this is a buy, even going so far as to suggest it might be the best AI play currently available.
Market Insights
While UBS Group's analyst Timothy Arcuri's bullish stance on ARM Holdings is the focus, it's worth noting that other analysts also have positive views on the company. For instance, Barclays has raised ARM's price target to $155, citing its strong focus on advanced serialization and deserialization technology. Mizuho, on the other hand, has ARM among its top picks for 2025 in semiconductors, driven by promising sectors in AI, custom silicon, and enhanced connectivity.
Moreover, ARM's strategic partnership with NVIDIA Corporation could significantly impact its growth. NVIDIA's analysts have a average target price of $173.08 USD for the company, with high target prices reaching up to $220.00 USD. The integration of ARM's CPU with NVIDIA's GPU in the Grace-Blackwell superchip is seen as a significant growth driver, potentially helping ARM penetrate high-performance computing markets.
However, while the potential for growth is clear, the current valuation of ARM is quite high. Some analysts question whether the market has overestimated the AI's impact on ARM's long-term financials, suggesting a potential risk if growth doesn't align with market expectations.
In conclusion, while there's a general consensus that ARM Holdings' stock is expected to perform well due to its strategic partnerships and AI-related advancements, its high valuation poses a risk. Potential price targets range from $134.16 to $155, with some analysts projecting even higher values.
Investors who are interested in finance and money may find ARM Holdings an attractive investment due to its potential growth in the AI sector, as suggested by analysts like Timothy Arcuri from UBS Group. By investing in ARM, individuals are putting their money towards a company that is expected to benefit significantly from advancements in AI, particularly in the data center segment.