Jefferies Raises Arm Price Target on Stronger AI-Driven Demand Outlook
Jefferies raised its price target on Arm Holdings to $320 from $290, citing stronger AI-driven demand for CPUs. The analyst firm highlighted growing demand from agentic AI applications and new customers including Oracle and ByteDance. Jefferies now expects Arm's AI CPU revenue to reach $18 billion in fiscal 2031, above the company's guidance of $15 billion. The total addressable market for CPUs could reach $200 billion by 2030, with Arm expected to capture at least a 15% share. Meta is projected to become Arm's largest customer, followed by OpenAI, Oracle, and ByteDance. Jefferies also raised near-term revenue estimates and noted potential royalty opportunities from a SoftBank AI accelerator. The firm forecasts Arm's revenue and earnings to grow at over 40% annually through fiscal 2031, with a five-year EPS CAGR of 45%. The revised target is based on a fiscal 2031 P/E multiple of 29 times.
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