Arm's (ARM) fiscal 2031 assumptions at its "Arm Everywhere" event in San Francisco point to a significant expansion opportunity but appear "too ambitious", BofA Securities said in a Wednesday research note.

The brokerage said that the company's targets imply an earnings per share of $9 by fiscal 2031, compared with its base-case estimate of roughly $6.50.

Analysts said that the company's fiscal 2031 target model assumes a royalty compound annual growth rate of 20%, a CPU total addressable market of $100 billion and a chip market share of 15%. BofA, however, expects a royalty compound annual growth rate of about 15%, CPU total addressable market of $80 billion and a chip share of 10%.

The investment firm said that the CPU market is getting "very crowded," noting that Arm's artificial general intelligence CPU has limited opportunity since hyperscalers have their own customized CPUs and key customers have other existing agreements.

BofA reiterated its neutral rating on the stock and increased its price objective to $155 from $140.

Shares of Arm were up nearly 17% in Wednesday trading.

Price: 157.49, Change: +22.53, Percent Change: +16.69