Shares of Arm Holdings continued to fall Wednesday after sinking more than 10% on Tuesday, as investors rotated out of numerous highflying artificial-intelligence names. But Wall Street is still bullish on the chip designer.

Arm stock fell 4% to $351.89 on Wednesday and is currently down around 19% since the beginning of the week. Despite the stock's recent decline, Arm remains up 227% this year and has gained 127% over the past 12 months, according to Dow Jones Market Data.

TD Cowen and UBS both see more upside and raised their price targets on the semiconductor name on Wednesday.

UBS analysts, led by Timothy Arcuri, raised their Arm stock price target to $470 from $260, which represents 33% upside from current trading levels. The firm maintained a Buy rating on the stock.

Meanwhile, TD Cowen analysts on Wednesday noted that, as agentic AI evolves, central processing units (CPUs) are the better long-term bet compared to graphics processing units (GPUs). The firm raised its price target on Arm to $475 from $265 and kept their Buy rating. TD Cowen's new price target implies 35% upside from trading levels on Wednesday.

Much of Wall Street's excitement around Arm is currently based on its internal CPUs for AI data centers.

At its core, Arm makes an instruction-set architecture, the most basic interface between CPU chips and software, and it is the major alternative to the x86 architecture used by Intel and Advanced Micro Devices. On top of that, Arm makes designs for the different parts of chips, and it makes money from licensing and royalties on sales to customers like Apple, Nvidia, Samsung, Qualcomm, and others.

However, the company has now stepped into full-blown chip production.

"The real investor debate, in our view, is revenue potential for Arm's standalone CPU," Arcuri wrote Wednesday.

The UBS analyst team is in the camp that believes Arm's internal CPU revenue will grow to around $14 billion by 2030. Arm's internal chip won't become financially material until fiscal 2028, according to the company.

"Arm's core competency lies in latency and efficiency -- which aligns well with hyperscaler needs," Arcuri wrote.

Wednesday's price-target hikes for Arm stock come after Bank of America raised its target to $460 from $335 and reiterated its Neutral rating on Tuesday.

"We see Arm as one of the most prominent beneficiaries of the rising server CPU tide," BofA analyst Vivek Arya wrote. He added that Arm at $420 is "fairly valued."

Amid the recent selloff, the stock is now down 16% from that price.

Write to Kit Norton at kit.norton@barrons.com

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June 24, 2026 11:36 ET (15:36 GMT)

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