Arm Holdings plc research snapshot
ARM AI stock analysis reads Arm Holdings plc as a scarce semiconductor IP platform with accelerating AI demand, but the stock has repriced sharply from its July peak. The July 29, 2026 fiscal Q1 2027 report beat revenue and earnings estimates, with royalty revenue up 22% and AGI CPU demand above $2 billion, yet guidance implied a cooler smartphone-driven royalty quarter and the shares gave back part of an early gain. At the August 2, 2026 data cutoff, the latest verified close was $239.69 from July 31, 2026, market capitalization checked near $256 billion, and the stock was about 47% below its $452.70 52-week high. This page is informational research and not investment advice.
Current price
$239.69 close on July 31, 2026
Market cap
About $256 billion
AI score
68 / 100
Rating
Scarce semiconductor IP franchise with strong AI demand, but the July repricing and smartphone softness raise the bar for execution
Trend status
Long uptrend intact above the 200-day average, but a sharp correction off the July peak and weak momentum
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Arm licenses processor architecture, IP, compute subsystems, and software that customers use in smartphones, data centers, edge AI, automotive, and physical AI, creating a high-margin, capital-light model. | High |
| Moat | The moat comes from ecosystem scale, software compatibility, design lock-in, power efficiency, Armv9 and Compute Subsystem adoption, and the transition of AI infrastructure toward Arm-based CPUs. | High |
| Management | Rene Haas is expanding Arm from pure IP into the Arm AGI CPU silicon business. Demand is strong, but the new business adds manufacturing, supply chain, and margin execution risk. | Medium |
| Financial trend | Fiscal Q1 2027 revenue rose 22% to $1.29 billion, royalty revenue rose 22% to $715 million, license and other revenue rose 23% to $574 million, and non-GAAP EPS rose 29% to $0.45. | High |
| Valuation | Tool-checked valuation was about 244.6x trailing EPS, 29.7x book value, 170.0x free cash flow per share, and 49.7x revenue per share using the $239.69 close. | Medium |
| Technical trend | The longer trend remains above the 200-day average, but ARM closed below its 20-day and 50-day averages with an RSI near 37.5 after the July selloff. | Medium-high |
| Risk level | The thesis can fail if AGI CPU supply stays tight, smartphone weakness spreads, royalty growth slows to low double digits, margins dilute, China exposure shifts, or the valuation multiple compresses further. | Medium-high |
| AI confidence | High for filed financials, market data, and valuation math. Lower for forward returns because ARM is priced on long-duration AI optionality and just showed high sensitivity to guidance details. | Medium |
| Investment certainty | Medium-low certainty at the current price because the business is strong but the valuation still assumes a large AI expansion and the July drawdown shows how fast sentiment can reset. | Medium |
ARM AI stock forecast
The ARM AI stock forecast is scenario-based around the $239.69 July 31, 2026 close. The bullish case requires AGI CPU demand to convert into revenue beyond the $1 billion target, data center royalty growth to keep doubling, and the stock to reclaim its broken moving-average zone. The base case assumes strong business growth but a more modest valuation. The bearish case assumes smartphone and memory weakness spread, AGI CPU supply stays tight, or the multiple compresses toward a lower-growth semiconductor IP level.
$310 to $400
More likely if AGI CPU revenue exceeds the $1 billion target, data center royalties keep more than doubling, Armv9 and Compute Subsystem mix improves, smartphone weakness passes, and ARM reclaims the $278 to $325 moving-average and target zone on sustained volume.
$240 to $295
More likely if revenue and non-GAAP EPS grow at the guided pace, royalty growth settles in the high teens, and investors hold the stock near the $286.79 average analyst target. This is the closest scenario to the current price and analyst consensus.
$150 to $235
More likely if smartphone-driven royalty growth slips into low double digits, AGI CPU manufacturing or margin execution disappoints, foundry capacity stays constrained, export rules or China exposure weaken, or the stock resets toward the lower analyst targets near $150 to $230.
ARM AI technical analysis
ARM AI technical analysis starts from the $239.69 July 31, 2026 close. The stock closed below its 5-day, 20-day, and 50-day moving averages and near its 100-day average after a sharp July correction, with a 14-day RSI near 37.5 and negative directional pressure. Because this static page does not fetch request-time chart data, moving averages, volume, and volatility should be confirmed on a live chart before use.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $239.69 | July 31, 2026 closing price used for this August 2 static page. After-hours trading showed about $234.92. |
| Near support | $234 to $240 | The July 31 intraday low around $239.26 and the after-hours area near $235. Treat it as a planning zone, not a guaranteed floor. |
| Major support | $190 to $200 | The 200-day moving average sits near $189.88. A sustained break below it would challenge the long-term uptrend. |
| Near resistance | $278 to $290 | The 20-day moving average near $278.18 and the average analyst target near $286.79 mark the first overhead zone after the selloff. |
| Key resistance | $325 to $453 | The 50-day moving average near $324.65 and the reported $452.70 52-week high. Reclaiming this path would signal a full trend repair. |
| 50-day moving average | About $324.65 | StockAnalysis and Barchart both showed ARM well below its 50-day average at the cutoff. |
| 200-day moving average | About $189.88 | The 200-day average remains below the price, so the long-term trend is still positive until this level is lost. |
| Momentum | RSI near 37.5, bearish directional pressure | A 14-day RSI around 37.5 with negative directional index showed weak momentum after the July decline. |
| Volume | About 7.2 million shares on July 31 | Volume ran above the roughly 6.3 million 20-day average during the selloff, which points to active distribution rather than quiet drift. |
| Volatility | 14-day ATR near $26.46 | Barchart showed historic volatility above 80% at the 14-day window, so position sizing matters more than usual. |
| Invalidation | Close below $234, then $190 | A decisive close below the $234 to $240 support zone weakens the short-term setup. A break below the 200-day area near $190 would challenge the long trend. |
ARM AI trading strategy
The ARM AI trading strategy is a research framework, not personalized advice. It should be paired with live chart checks, position sizing, stop or invalidation rules, and fresh review of filings, earnings guidance, AGI CPU supply news, and smartphone data.
Wait for ARM to hold above the $234 to $240 support zone and then reclaim the $278 to $290 resistance area with rising volume before treating the July correction as repaired.
A daily close below $234 or a failed reclaim after strong AI or AGI CPU headlines should invalidate the setup.
If ARM stabilizes near $240 while RSI stays near oversold, compare price action with fiscal Q2 guidance delivery, AGI CPU supply updates, royalty growth, and smartphone unit data.
Do not average down just because the franchise is strong. Define a maximum loss and review the very high valuation multiple before adding.
Track royalty growth, license and other revenue, data center royalty trends, AGI CPU revenue conversion, SoftBank-related revenue, Armv9 and Compute Subsystem mix, smartphone and memory conditions, foundry capacity, and stock-based compensation.
Reduce confidence when price strength is driven by AI headlines without matching revenue, margin, cash flow, or supply evidence.
Investment research summary
Arm sells architecture licenses, processor IP, compute subsystems, software, and royalty rights that help chipmakers and cloud providers build power-efficient compute. Customers pay for energy efficiency, software compatibility, and access to a roadmap used across nearly every smartphone and a fast-growing share of data center CPUs.
Arm has ecosystem scale, software compatibility, design lock-in, low-power heritage, Armv9 royalty uplift, and now a role as the CPU foundation for AI infrastructure. NVIDIA, Google, AWS, Microsoft, and Qualcomm all anchor new AI CPU programs on Arm.
The stock can fail if investors overpay for AI optionality, AGI CPU supply stays tight and caps upside, RISC-V or custom architectures take share, smartphone and memory weakness slows royalties, China exposure weakens, or production silicon dilutes the high-margin IP model.
Rene Haas has pushed Arm from pure IP licensing into the Arm AGI CPU silicon business while data center royalty growth keeps doubling. The key test is whether the new silicon business adds revenue without wrecking margins or absorbing too much scarce manufacturing capacity.
AI inference, cloud efficiency, edge AI, and physical AI all favor energy-efficient architecture. IDC reported Arm-based accelerated server spending has nearly doubled in two quarters and now exceeds x86, so Arm sits near the standards layer of a fast-growing value chain.
At roughly 244.6x trailing earnings and 170x free cash flow, the price still embeds very high growth expectations even after the July drawdown. Margin of safety improves only if revenue and EPS power rise rapidly or the multiple resets to a lower level before fundamentals disappoint.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| ARM price | $239.69 close on July 31, 2026; after-hours about $234.92 | StockAnalysis quote snapshot | August 2, 2026 |
| Market capitalization | About $256 billion. Calculated as $239.69 x 1.07 billion shares = $256.47 billion versus a reported $256.01 billion, a 0.18% deviation from financial_rigor.py | financial_rigor.py market cap verification and StockAnalysis | August 2, 2026 |
| Shares outstanding | About 1.07 billion ordinary shares | StockAnalysis share statistics | August 2, 2026 |
| Fiscal Q1 2027 revenue | $1.29 billion, up 22% year over year, a record first quarter | Arm fiscal Q1 2027 earnings report and StockAnalysis | August 2, 2026 |
| Fiscal Q1 2027 royalty revenue | $715 million, up 22% year over year | Arm fiscal Q1 2027 earnings report | August 2, 2026 |
| Fiscal Q1 2027 license and other revenue | $574 million, up 23% year over year, a record first quarter | Arm fiscal Q1 2027 earnings report | August 2, 2026 |
| Fiscal Q1 2027 non-GAAP EPS | $0.45, up 29% year over year, above guidance | Arm fiscal Q1 2027 earnings report | August 2, 2026 |
| Fiscal Q1 2027 free cash flow | $665 million in the quarter and $1.4 billion over the trailing twelve months | Arm fiscal Q1 2027 earnings call | August 2, 2026 |
| Fiscal Q2 2027 guidance | Revenue of $1.38 billion, plus or minus $50 million, about 22% year over year at the midpoint, with non-GAAP EPS of $0.47, plus or minus $0.04 | Arm fiscal Q1 2027 earnings call | August 2, 2026 |
| AGI CPU demand | Demand exceeds $2 billion, above the $1 billion opportunity outlined for fiscal 2027 and fiscal 2028, with improved supply confidence | Arm fiscal Q1 2027 earnings call | August 2, 2026 |
| FY2026 revenue | $4.920 billion, up 22.79% year over year | StockAnalysis and Arm 2026 Form 20-F | August 2, 2026 |
| FY2026 net income | $904 million | StockAnalysis financials | August 2, 2026 |
| TTM revenue and net income | TTM revenue about $5.16 billion, up 25.1%; TTM net income about $1.04 billion | StockAnalysis financials | August 2, 2026 |
| Cash and debt | Cash and investments about $3.89 billion and total debt about $464 to $485 million at June 30, 2026, leaving net cash near $3.4 billion | StockAnalysis balance sheet data | August 2, 2026 |
| Valuation tool output | 244.58x trailing EPS, 29.66x book value, 169.99x free cash flow per share, and 49.73x revenue per share using the $239.69 price input | financial_rigor.py valuation verification | August 2, 2026 |
| Analyst consensus | Buy rating with an average 12-month target near $286.79, a median near $260, and a range of $125 to $500 from 40 analysts | StockAnalysis forecast and analyst summaries | August 2, 2026 |
| Moving averages and momentum | 50-day moving average about $324.65, 200-day moving average about $189.88, and RSI near 37.5 | StockAnalysis statistics and Barchart technical analysis | August 2, 2026 |
| Technical range | Reported day range near $239.26 to $261.91 on July 31 and a 52-week range near $100.02 to $452.70 | StockAnalysis quote data | August 2, 2026 |
This ARM AI stock analysis page is an informational tool only. It is not investment advice, a recommendation, or a promise of future returns. Forecast scenarios are based on available data as of August 2, 2026, may be incomplete, and can be wrong if new filings, market prices, AGI CPU supply, licensing activity, smartphone and memory conditions, export rules, customer demand, or macro conditions change.
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