Jefferies Lifts Arm Price Target to $320 on AI-Driven CPU Demand Surge
Jefferies investment bank raised its price target on Arm Holdings to $320 from $290, maintaining a 'buy' rating and citing surging demand for the company's AGI CPUs driven by agentic artificial intelligence. The new target implies 20% upside from the current share price of $267.19. Jefferies now forecasts Arm's AGI CPU revenue at $18 billion by fiscal 2031, exceeding the company's own guidance of $15 billion. Key customers are expected to include Meta, OpenAI, Oracle, and ByteDance, with Oracle and ByteDance among recent signings. The total addressable market for CPUs by 2030 has expanded to an estimated $200 billion, with Arm expected to capture at least a 15% share. Jefferies also noted rising data center royalty rates, potential for SoftBank to launch a GPU using Arm designs, and forecast 45% annual earnings growth over five years. The new target is based on 29 times 2031 earnings, a premium justified by Arm's higher margins and growth.
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