Morgan Stanley Issues Pessimistic Forecast for ARM (NASDAQ:ARM) Stock Price

ARM (NASDAQ:ARM) had its price target dropped by Morgan Stanley from $180.00 to $135.00 in a report released on Friday,Benzinga reports. The firm currently has an “overweight” rating on the stock. Morgan Stanley’s price target suggests a potential upside of 16.31% from the stock’s previous close.

Other analysts also recently issued reports about the company. Citigroup downgraded ARM from a “buy” rating to a “hold” rating in a report on Tuesday, January 13th. TD Cowen restated a “buy” rating on shares of ARM in a research note on Thursday, November 6th. The Goldman Sachs Group lowered shares of ARM from a “neutral” rating to a “sell” rating and dropped their price target for the company from $160.00 to $120.00 in a research note on Monday, December 15th. Wells Fargo & Company raised their price objective on shares of ARM from $190.00 to $195.00 and gave the stock an “overweight” rating in a report on Thursday, November 6th. Finally, Raymond James Financial initiated coverage on shares of ARM in a report on Friday, November 21st. They issued a “hold” rating for the company. Sixteen research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $172.14.

ARM Price Performance

ARM opened at $116.07 on Friday. The business has a fifty day moving average price of $121.93 and a 200 day moving average price of $140.85. ARM has a 12 month low of $80.00 and a 12 month high of $183.16. The stock has a market capitalization of $122.63 billion, a price-to-earnings ratio of 148.81, a PEG ratio of 6.95 and a beta of 4.34.

ARM (NASDAQ:ARM) last announced its quarterly earnings data on Wednesday, November 5th. The company reported $0.39 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.33 by $0.06. ARM had a return on equity of 15.03% and a net margin of 18.81%.The business had revenue of $1.14 billion during the quarter, compared to analysts’ expectations of $1.06 billion. During the same quarter last year, the business posted $0.30 EPS. The business’s quarterly revenue was up 34.5% compared to the same quarter last year. ARM has set its Q3 2026 guidance at 0.370-0.450 EPS. On average, research analysts anticipate that ARM will post 0.9 earnings per share for the current year.

Institutional Investors Weigh In On ARM

Several hedge funds have recently made changes to their positions in the business. Sustainable Growth Advisers LP increased its stake in ARM by 116.8% in the 2nd quarter. Sustainable Growth Advisers LP now owns 3,457,220 shares of the company’s stock valued at $559,171,000 after buying an additional 1,862,626 shares during the period. Capital Research Global Investors purchased a new stake in shares of ARM in the third quarter valued at about $243,098,000. Hyperion Asset Management Ltd acquired a new position in shares of ARM during the third quarter worth about $202,980,000. Schroder Investment Management Group increased its stake in shares of ARM by 41.7% during the second quarter. Schroder Investment Management Group now owns 4,745,957 shares of the company’s stock worth $767,611,000 after acquiring an additional 1,396,684 shares during the period. Finally, Invesco Ltd. raised its holdings in ARM by 139.9% during the second quarter. Invesco Ltd. now owns 1,381,906 shares of the company’s stock worth $223,509,000 after purchasing an additional 805,886 shares in the last quarter. Institutional investors and hedge funds own 7.53% of the company’s stock.

ARM Company Profile

Arm Limited (NASDAQ: ARM) is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm’s product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.