Bernstein Raises ARM Holdings Target Price to $500, Aiming Squarely at the AI Frenzy

▲ Artificial Intelligence (AI) semiconductor stocks, Wall Street, US stock market / AI-generated image

Wall Street is pouring in target price upgrades for ARM Holdings (Arm Holdings, ARM). Bernstein reignited the artificial intelligence (AI) semiconductor rally by raising its target price from $300 to $500.

According to investment media Barchart on June 20 (local time), Bernstein upgraded ARM Holdings' target price by 66.7% from the previous $300 to $500. It maintained an 'Outperform' rating, equivalent to a buy recommendation.

Bernstein cited the expansion of the agentic AI market as a key rationale. It judged that Arm architecture, with its strength in power efficiency, is suitable for next-generation AI server environments that require autonomous task execution and data orchestration.

ARM Holdings launched its dedicated Arm AGI CPU in the previous quarter. The company stated that this product delivers more than twice the performance per rack compared to x86-based platforms. Driven by strong demand, it believes the company can achieve its own chip sales target of $15 billion faster than expected.

Performance also supported investor sentiment. Revenue for the fourth quarter of fiscal year 2026 increased by 20% year-over-year to $1.49 billion, reaching an all-time high. License revenue grew by 29% to $819 million, and diluted earnings per share increased by 45% to $0.29.

However, valuation concerns remain. ARM Holdings' forward adjusted price-to-earnings ratio is 202.35x, significantly exceeding the industry average of 24.13x. While Wall Street's consensus target price is $282.93, lower than the current level, Bernstein and Mizuho are both betting on the expansion of AI CPU demand by proposing $500.

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