On Friday, Daiwa Securities revised its stance on Arm Holdings (NASDAQ:ARM), moving the stock's rating from "Buy" to "Neutral." Accompanying this change, the firm significantly increased the price target for Arm Holdings to $130.00, up from the previous $63.00.
The adjustment followed a period of substantial share price appreciation for Arm Holdings, which saw an increase of over 60%, surpassing $130 since the firm's initial coverage started on October 9, 2023. The analyst acknowledged the company's robust quarterly performance and guidance, which highlighted the strength of Arm Holdings' strategic positioning and business model. These factors had previously supported Daiwa's optimistic view of the company.
Despite the positive assessment of Arm Holdings' recent performance, Daiwa Securities adopted a more conservative outlook due to the rapid rise in the company's share price. The firm's analyst believes that the current share price can be sustained, noting the tight 90% ownership of the stock.
Investors may note the significant revision in the price target, which more than doubles the previous figure. This new target aligns with the current trading level of Arm Holdings' shares, reflecting the company's recent market gains.
The change in rating to "Neutral" suggests that Daiwa Securities sees limited upside for new investors at the current share price, despite the company's strong fundamentals. This stance indicates a shift in expectation for the stock's short-term performance.
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