Assessing Arm Holdings (NasdaqGS:ARM) Valuation After New AGI CPU And AI Infrastructure Partnerships

Arm Holdings (ARM) is drawing fresh attention after unveiling its AGI CPU for AI inference and teaming up with Rebellions and SK Telecom to build Arm based AI servers for telecom focused data centers.

See our latest analysis for Arm Holdings.

The AGI CPU launch and fresh AI partnerships have arrived alongside strong momentum, with a 30 day share price return of 30.93% and a 1 year total shareholder return of 57.76% signaling that enthusiasm has been building rather than fading.

If you are interested in how AI infrastructure themes are playing out beyond Arm, this could be a useful moment to scan other 37 AI infrastructure stocks

With Arm now trading at around US$159.34 after a powerful run, and with the stock sitting only a small distance from an average analyst price target near US$167.78, the key question is whether there is still a reasonable entry point here or if the market is already pricing in the growth story.

Most Popular Narrative: 306.9% Overvalued

At a last close of $159.34 versus a narrative fair value of $39.16, the most followed view on Arm suggests the market price is far ahead of that estimate.

ARM is still in a speculative phase and I’m maintaining my $53B forward value for 2029. In Q2’25 ARM reported revenues of $844M, up 5% YoY. Sales were down 10% from Q1, as the company marked its first sequential drop after Q4’FY23. The company made $3.5B in revenues over a 12-month period, and is up by 18% on a TTM basis. This is close to my revised 16% CAGR estimate, and I maintain my 2029 $7.3B revenue target for ARM. Management issued Q3 and FYE 2025 guidance at the $945M, and $3.95B respective midpoints.

Read the complete narrative.

Curious how that fair value is built? The narrative leans on ambitious revenue compounding, firm profit margins and a future earnings multiple that assumes Arm keeps its edge. The exact mix behind that $39.16 figure may surprise you.

Result: Fair Value of $39.16 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if Arm’s patent protections hold up better than expected or long term deals like Apple’s deepen, the current fair value narrative could be challenged.

Find out about the key risks to this Arm Holdings narrative.

Next Steps

If all of this sounds mixed, that is exactly why it pays to look under the hood yourself and then weigh the 1 key reward

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Do not stop at one story; use this moment to compare Arm with other ideas so you can decide where your next dollar works hardest.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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