Bank of America resets Arm stock forecast after earnings

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Tyler Bundy

Fri, May 8, 2026 astatine 12:47 PM CDT 5 min read

Bank of America raised its terms nonsubjective connected Arm Holdings aft the chip-design institution posted a stronger March quarter, but the steadfast stopped abbreviated of turning much bullish connected the banal arsenic investors proceed to terms successful a larger artificial-intelligence opportunity.

In the Bank of America note, expert Vivek Arya reiterated a Neutral standing connected Arm and raised the firm’s terms nonsubjective to $245 from $180. The caller people implies astir 3.2% upside from the stock’s listed terms of $237.30 successful the note. Bank of America said Arm’s agentic AI CPU accidental successful some intelligence spot and chiplets remains connected track, though overmuch of that accidental whitethorn already beryllium reflected successful the company’s valuation.

Arm’s latest 4th gave investors much enactment for the semipermanent AI story, particularly arsenic request for information halfway and AI-related computing continues to rise. The institution reported March-quarter gross of $1.49 billion, which was supra Bank of America’s $1.47 cardinal estimation and Street expectations of $1.47 cardinal successful the note. Non-GAAP diluted EPS came successful astatine 60 cents, supra Bank of America’s 58-cent estimation and Street expectations of 58 cents.

Arm Holding’s AI communicative continues to physique

Bank of America said Arm’s March 4th was successful enactment with modestly amended than expected, driven by continued stock and contented gains successful AI and information center, partially offset by near-term smartphone weakness. The steadfast pointed to Arm’s positioning crossed agentic CPUs, including cardinal compute subsystem products and a chiplet accidental tied to ample AI customers.

The AI and information halfway strengths showed up successful the company’s numbers. In the Bank of America note, the steadfast said information halfway gross roseate much than 100% twelvemonth implicit twelvemonth successful the March quarter. It besides said Arm reached astir 50% stock crossed unreality servers, inclusive of CPUs, switches, and web interface cards.

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The steadfast said royalty contented gains, moving from astir 50 cents per halfway to $1 per core, should proceed done fiscal 2027, helped by much cores per spot and broader adoption of Arm-based designs.

Bank of America besides said Arm’s afloat silicon and chiplet accidental for artificial wide quality could lend much than $8 cardinal to $10 cardinal successful income by fiscal 2031. Arm’s ain presumption appears higher, with the enactment saying absorption sees a $15 cardinal accidental and much than $9 of EPS powerfulness implicit that longer-term horizon.

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