Loop Capital: Arm Holdings (NASDAQ:ARM) has room for growth
ARM Holdings (NASDAQ:ARM) has attracted positive attention, with analysts suggesting that the company has room for growth, especially due to its strong presence in the AI chip market. Despite a slight decline in stock prices after the CNBC report, ARM’s future outlook remains promising, with analysts including Loop Capital’s Anandavarua showing confidence in the company’s trajectory.
ARM performance and growth outlook
ARM Holdings recently reported strong revenue performance, surpassing both revenue and revenue expectations, but faced a slight setback with guidance next year. Nevertheless, Loop Capital’s Anandavarua is optimistic about the company’s future, specifically raising its price target from $180 to $195. Some key points that Barua highlighted are:
Revenue Beat: ARM exceeded expectations in both revenue and revenue. Inline Guidance: Guidance for next quarter wasn’t that exciting, but Barua expects more growth in the long term. Bully Outlook: Barua is watching Arm’s extremely bullish story of FY2026, especially with the release of the March quarter guidance in April. AI Demand: Increased demand for artificial intelligence (AI) chips is expected to drive the growth of ARM’s product line, particularly in “computer systems.”
ARM’s ability to secure key trading in the AI market is considered a key driver for continued growth, with several key trading already appearing in the March pipeline.
Don’t be afraid of Deepseek
One of ARM’s most notable challenges is the rise of China’s AI program, Deepseek. Despite some issues with its capabilities, including inaccuracies when discussing specific delicate topics, DeepSeek represents a potential competitor. However, ARM CEO Rene Haas is confident in his company’s position. Key insights from HAAS include:
Distillation Process: HAAS acknowledges that Deepseek’s AI was developed using distillation. Here, AI models are trained by leveraging other existing AI models. He highlighted that Openai’s ChatGpt played an important role in this process. ARM Resilience: Despite the emergence of Deepseek, ARM is confident in its ability to adapt and improve its business models, reducing its vulnerability to emerging competitors. There is no major threat: Haas does not believe that Deepseek represents a serious threat to ARM’s market leadership as ARM continues to innovate and maintain the advantages of the AI chip space.
ARM inventory outlook
ARM’s future growth outlook is supported by its position as a leader in the AI chip market, with demand increasing. Wall Street analysts have expressed positive outlook on ARM inventory in a medium purchase consensus rating. Here’s a breakdown of stock performance and analyst opinions:
Analyst Consensus: The consensus rating is based on 17 purchases, 4 holds and 1 sale over the past three months. Stock Performance: ARM had a 8.21% rally at the stock price last year. Price Target: The average price target for Armstock is $179, indicating an upside potential of 11.1% from the current level.
Important highlights:
Recent Performance: ARM Holdings surpassed revenue and revenue expectations, but faced a slight setback in guidance. Analyst Outlook: Loop Capital’s Anandavaru has raised ARM’s price target from $180 to $195, citing strong growth potential in an AI-driven market. Medium purchase consensus rating based on 17 purchases, 4 holds and 1 sale. AI Demand: ARM’s AI chip business is expected to experience significant growth with several major transactions in the pipeline in March. Deepseek Competition: CEO Rene Haas is confident in ARM’s innovation and adaptability, believing the threat posed by Deepseek. Inventory Rise: Based on analyst price targets, ARM shares have an upside potential of 11.1%.
ARM Holdings is particularly well suited for future growth as it focuses on AI and strategic adaptations to emerging competitors like Deepseek. Analysts are optimistic about the company’s long-term outlook, particularly in the AI chip sector.