NEW YORK, May 26, 2026, 10:03 EDT
Arm Holdings shares edged lower Tuesday morning in New York after a quick AI rally that sent the chip stock close to record highs and past Bernstein’s $300 target. The U.S.-listed stock lost 1.3% to $302.44 after an open at $317.52 and a high of $323.89.
Arm’s pullback is in focus as its recent rally has made the stock something of a gauge for whether investors are starting to price in a fresh chip cycle tied to CPUs, the server chips used to shift data and manage workloads. Shares of Arm jumped 46.5% last week. The S&P 500 put on about 0.9%, and the Nasdaq Composite rose roughly 0.5%, according to The Motley Fool.
AI spending is widening past graphics chips, which powered the training of big models. Arm told investors that “agentic AI” — software able to do multi-step tasks with less people steering — is driving more demand for CPUs for orchestration, memory, security and moving data inside data centers. SEC
Bernstein’s David Dai started coverage last week with an outperform rating and a $300 price target. Dai said Arm “stands out in server CPUs given its unparalleled power efficiency” and called the company at the “center of the renaissance of CPUs” as AI workloads move to autonomous agents. Benzinga
Arm’s fiscal fourth-quarter numbers gave the trade support. The company said revenue rose 20% to a record $1.49 billion, with licensing up 29% to $819 million and royalties 11% higher at $671 million. For the full year, revenue was $4.92 billion. CEO Rene Haas said demand for the Arm AGI CPU, its first data-center chip, “exceeded expectations.” SEC
Arm said it had over $2 billion in customer demand lined up for its AGI CPU across fiscal 2027 and 2028, more than twice what it reported six weeks ago. It also named Meta as lead partner and co-developer. More than 50 companies, including AWS, Google Cloud, Microsoft, Nvidia, Oracle, Samsung, SK Hynix and TSMC, are backing its silicon plans.
Nvidia turned up the heat. The chipmaker posted record fiscal first-quarter revenue of $81.6 billion, up 85% from last year. Data-center revenue also hit a new high at $75.2 billion. CEO Jensen Huang said the push to build AI factories is the “largest infrastructure expansion in human history.” NVIDIA Newsroom
Nvidia is pushing into the CPU market too. On its earnings call, the company said Vera, a CPU using custom Arm cores and targeting agentic AI, unlocks a $200 billion total addressable market. Nvidia expects almost $20 billion in CPU revenue this year from Vera, which it says makes the company a partner, a customer indicator, and a rival benchmark at the same time.
Arm moved ahead of Micron in 2026 returns inside iShares Semiconductor ETF names last week, per a Benzinga snapshot, with Intel in first, Arm in second, and Micron third. Tuesday early, Micron jumped 14.3%, Intel added 1.8%, and Nvidia gained 0.4%. The AI chip trade spread beyond just Arm.
But the easy gains could be done for now. Arm is trading just over Dai’s $300 target, according to a TradingView/Invezz post. Critics have flagged its forward price-to-earnings ratio, now near 191, and Barchart said the stock’s relative strength index has jumped into the high 60s, close to overbought territory. Options traders on Moomoo called the 38% rally over three sessions “running into a wall.” TradingView Barchart.com Moomoo
Execution is now the next thing investors are watching. Arm says it expects initial AGI CPU production revenue in the fiscal fourth quarter. Its longer-term goals are $15 billion from AGI CPUs and $10 billion in intellectual-property revenue by fiscal 2031. The stock has already hit one of Wall Street’s most aggressive targets, so these timelines are key for investors now.
