New York, May 21, 2026, 05:01 (EDT)
- Arm closed Wednesday at $256.73, up 15.05%, after touching $259.44 in regular trading.
- Bernstein’s David Dai initiated coverage with an outperform rating and a $300 target, citing demand for server CPUs tied to agentic AI.
- U.S. regular trading had not opened in New York; May 21 is not listed as an exchange holiday.
Arm Holdings’ Nasdaq-listed shares head into Thursday’s premarket session near record levels after a 15% surge, as investors piled into the British chip designer on fresh bets that artificial-intelligence data centers will need far more central processing units, or CPUs, the general-purpose chips that run server workloads. The stock closed Wednesday at $256.73, up 15.05%, after trading as high as $259.44.
The move matters now because the AI trade is widening beyond Nvidia’s graphics processors and into the less glamorous chips that coordinate data, memory and software inside data centers. Reuters reported that the Philadelphia SE Semiconductor index jumped 4.5% on Wednesday, with Arm’s U.S.-traded shares up 15% and Astera Labs up 17.7%, as Wall Street rallied before Nvidia’s results.
The New York cash session had not yet opened. NYSE holiday calendars list Memorial Day, May 25, as the next 2026 market holiday, not May 21, leaving the Arm move to be tested in regular Thursday trading.
Bernstein analyst David Dai lit part of the fuse this week, initiating Arm with an outperform rating and a $300 price target. Arm is “the center of the renaissance of CPUs,” Dai wrote, according to MarketWatch, arguing that agentic AI — systems that can carry out tasks with less human direction — may drive a fourfold rise in server CPU demand by 2030. MarketWatch
That case leans on Arm’s shift from licensing chip blueprints to selling its own data-center silicon. In March, Arm announced its AGI CPU, its first Arm-designed data-center CPU, and CEO Rene Haas said the move was “a defining moment” for the company as AI changes how computing is built. Arm Newsroom
Arm has said the AGI CPU has more than $2 billion of expected demand across fiscal 2027 and 2028. The company also reported record fourth-quarter revenue of $1.49 billion this month and gave a first-quarter revenue forecast slightly above Wall Street estimates, though it flagged soft smartphone demand and supply limits for the new AI chip.
Haas told Reuters in March that Arm expects the new chip to generate roughly $15 billion in annual revenue in about five years. “It’s a very pivotal moment for the company,” he said, adding that Arm had received working test chips from Taiwan Semiconductor Manufacturing Co, which is fabricating the device on 3-nanometer technology. Reuters
The competitive read-through is mixed. Intel and AMD also make CPUs and have rallied on hopes that AI inference — the running of AI models after they are trained — will need more general-purpose compute. Nvidia remains the sector’s bellwether: it forecast second-quarter revenue above Wall Street expectations and announced an $80 billion buyback, but its shares slipped after-hours as investors weighed competition and supply constraints.
The risk is that Arm’s stock has moved faster than the revenue. Reuters reported earlier this month that Arm had enough capacity to meet the first $1 billion of demand for the new chip but had not secured supplies beyond that, while memory shortages have weighed on smartphone sales, still a key end market for Arm designs.
There is also a legal overhang. Reuters reported that Bloomberg News said the U.S. Federal Trade Commission is investigating whether Arm is trying to monopolize parts of the semiconductor market through its licensing practices; Arm declined to comment on any possible investigation, while Qualcomm and Arm remain in a separate commercial dispute.
For now, the stock is trading like a company being re-priced from mobile-chip licensor to AI-infrastructure supplier. That is the bull case. The next test is whether Thursday’s regular session confirms Wednesday’s chase, or whether investors use the early jump to take money off the table.
