Arm Holdings PLC (NASDAQ:ARM) remains well positioned to benefit from long-term AI infrastructure growth, according to Citi, which reiterated its ‘Buy’ rating and $300 price target while modestly increasing its fiscal 2027 forecasts following the company's latest quarterly results.
Shares of Arm added more than 7% to trade hands at $241 on Thursday afternoon.
The analysts wrote that the quarter was stronger than expected, with revenue and profit exceeding consensus estimates and second-quarter guidance coming in ahead of Wall Street forecasts.
They added that strength in cloud AI and licensing more than offset a softer handset outlook, which was pressured by demand and product mix.
Reflecting the results, Citi raised its fiscal 2027 revenue estimate by 1% and its EBIT forecast by 4%, although Daswani noted that changes to the firm's longer-term projections remain modest.
The analyst also highlighted management's comments on growing demand for AGI-related CPUs, noting the company increased its addressable market outlook to more than $2 billion and reported improving visibility into that opportunity.
Despite only modest changes to its long-term estimates, Citi maintained its constructive stance on the stock, writing that Arm remains "a key AI infrastructure beneficiary" and that the recent pullback in the shares represents "an enhanced opportunity."
