Arm Holdings has begun to be rated overweight at Wells Fargo & Co.
Wells Fargo has initiated coverage of the British semiconductor design company, Arm Holdings (NASDAQ: ARM), with an overweight rating and a $155 target stock price, attracting attention on Friday. The stock price edged up slightly in pre-market trading.
"Analyst Joe Quatroki believes that by transitioning to higher royalty rates for the v9/Compute Subsystems solution and moderately expanding the market share of Arm-based CPUs (with PC and cloud infrastructure as the focus of NT), Arm can achieve performance that exceeds financial estimates," as noted in a memo to customers.
Furthermore, Quatrochi mentioned the possibility of increased royalty income in 2026 due to the high adoption rates of v9 and early Compute Subsystems, both with high royalty rates. "Based on our analysis assuming flat year-on-year shipments of Arm-based semiconductors, we estimate that the royalty rates for v9 and CSS in 2026 will range from the upper 40s to single digits, as indicated by the Street. We believe that if Arm-based semiconductor shipments recover moderately, there is a slight possibility of an increase in the Street's 2026 royalty income forecast."
"Analyst Joe Quatroki believes that by transitioning to higher royalty rates for the v9/Compute Subsystems solution and moderately expanding the market share of Arm-based CPUs (with PC and cloud infrastructure as the focus of NT), Arm can achieve performance that exceeds financial estimates," as noted in a memo to customers."Furthermore, Quatrochi mentioned the possibility of increased royalty income in 2026 due to the high adoption rates of v9 and early Compute Subsystems, both with high royalty rates. "Based on our analysis assuming flat year-on-year shipments of Arm-based semiconductors, we estimate that the royalty rates for v9 and CSS in 2026 will range from the upper 40s to single digits, as indicated by the Street. We believe that if Arm-based semiconductor shipments recover moderately, there is a slight possibility of an increase in the Street's 2026 royalty income forecast."
As Arm expands into the PC and infrastructure sectors, there is a possibility of gaining market share through the provision of computing subsystems. Arm anticipates reaching 20-25% of the PC CPU market share over time (currently at 10%). However, there is also a possibility of falling below the notable 50% share in five years. In terms of AI/cloud, given that China accounts for approximately 50% of shipments according to Gartner data, the focus will be on expanding opportunities for server CPUs. Quatrochi also emphasized the focus on AI chip opportunities.
Finally, Quatrochi mentioned that the ongoing lawsuit between Arm and Qualcomm over the Nuvia license agreement is a focal point for investors, but it is currently difficult to predict the outcome. QCOM At the end, Quatrochi mentioned that the ongoing lawsuit between Arm and Qualcomm over the Nuvia license agreement is a focal point for investors, but it is currently difficult to predict the outcome.
In October, Arm announced the revocation of Qualcomm's license in response to this dispute.Arm announced in October the revocation of Qualcomm's license in response to this dispute.
"Analyst Joe Quatroki believes that by transitioning to higher royalty rates for the v9/Compute Subsystems solution and moderately expanding the market share of Arm-based CPUs (with PC and cloud infrastructure as the focus of NT), Arm can achieve performance that exceeds financial estimates," as noted in a memo to customers.
Furthermore, Quatrochi mentioned the possibility of increased royalty income in 2026 due to the high adoption rates of v9 and early Compute Subsystems, both with high royalty rates. "Based on our analysis assuming flat year-on-year shipments of Arm-based semiconductors, we estimate that the royalty rates for v9 and CSS in 2026 will range from the upper 40s to single digits, as indicated by the Street. We believe that if Arm-based semiconductor shipments recover moderately, there is a slight possibility of an increase in the Street's 2026 royalty income forecast."
"Analyst Joe Quatroki believes that by transitioning to higher royalty rates for the v9/Compute Subsystems solution and moderately expanding the market share of Arm-based CPUs (with PC and cloud infrastructure as the focus of NT), Arm can achieve performance that exceeds financial estimates," as noted in a memo to customers."Furthermore, Quatrochi mentioned the possibility of increased royalty income in 2026 due to the high adoption rates of v9 and early Compute Subsystems, both with high royalty rates. "Based on our analysis assuming flat year-on-year shipments of Arm-based semiconductors, we estimate that the royalty rates for v9 and CSS in 2026 will range from the upper 40s to single digits, as indicated by the Street. We believe that if Arm-based semiconductor shipments recover moderately, there is a slight possibility of an increase in the Street's 2026 royalty income forecast."
As Arm expands into the PC and infrastructure sectors, there is a possibility of gaining market share through the provision of computing subsystems. Arm anticipates reaching 20-25% of the PC CPU market share over time (currently at 10%). However, there is also a possibility of falling below the notable 50% share in five years. In terms of AI/cloud, given that China accounts for approximately 50% of shipments according to Gartner data, the focus will be on expanding opportunities for server CPUs. Quatrochi also emphasized the focus on AI chip opportunities.
Finally, Quatrochi mentioned that the ongoing lawsuit between Arm and Qualcomm over the Nuvia license agreement is a focal point for investors, but it is currently difficult to predict the outcome. QCOM At the end, Quatrochi mentioned that the ongoing lawsuit between Arm and Qualcomm over the Nuvia license agreement is a focal point for investors, but it is currently difficult to predict the outcome.
In October, Arm announced the revocation of Qualcomm's license in response to this dispute.Arm announced in October the revocation of Qualcomm's license in response to this dispute.
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