Arm shares surge 117% year-to-date, but 24/7 Wall St. sets price target at $160.19, implying 32.9% downside

Arm's fiscal Q4 revenue reached $1.49 billion (up 20.1% YoY), beating the $1.47 billion consensus, with licensing surging 29% and royalties rising 11%. Full-year FY2026 revenue guidance is $4.92 billion (up 23%). The Arm AGI CPU has secured more than $2 billion in customer demand across FY2027 to FY2028.

24/7 Wall St. recommends selling Arm at current levels (current price $212.99) with a 12-month price target of $160.19 and 90% confidence. The stock trades at a 318 P/E and 100x forward earnings, with non-GAAP operating margin compressed from 52.8% to 49.1% as R&D rose 33% YoY to $493 million.

Bull cases project Arm-based server CPU shipments reaching 40% to 45% of market share by 2030 as the server CPU TAM expands from $30 billion to roughly $170 billion. Real demand includes Google's next-gen Axion CPUs, NVIDIA's Vera CPU, and AGI CPU integrations from Cerebras, OpenAI, Positron, and Rebellions.