Arm Holdings Price Target Raised to $205 as Server CPU Royalties Could Hit $4 Billion
HSBC upgraded Arm to Buy and raised its price target from $90 to $205, projecting server CPU royalties could reach $4 billion by 2030. Bank of America warns Arm’s standalone merchant CPU ramp may span three to four years and notes smartphone royalty revenue is declining.
1. HSBC Upgrades Arm to Buy with Major Price Target Raise
HSBC raised Arm’s rating to Buy and lifted its price target from $90 to $205. The upgrade cites strong AI server CPU demand using Arm’s v9 architecture and Neoverse Compute Subsystems, projecting server royalties could reach about $4 billion by 2030.
2. Merchant CPU Strategy Unveiled at Arm Everywhere Event
Bank of America analysts anticipate Arm will unveil its first standalone merchant CPU at the “Arm Everywhere” event, targeting the $60 billion agentic and AI CPU segment. The chiplet approach could boost per-chip revenue and profit once commercial ramp starts.
3. Near-Term Risks Include Smartphone Royalty Declines
Analysts warn full commercial ramp of the new CPU may take three to four years, while smartphone unit declines threaten roughly half of Arm’s royalty revenue. They also note increasing competition in the CPU market and maintain a Neutral rating with a $140 target.