“While expectations that Arm will be a beneficiary from AI growth may be adding a premium to the share price, we believe it is too soon to declare them an AI winner,” wrote analyst Sara Russo. “With the mobile end market maturing, we think expectations for top-line growth are too optimistic.”
Arm Holdings Plc shares fell on Monday after Bernstein started coverage on the newly public chip designer with an underperform rating, suggesting it may not be the beneficiary of artificial intelligence that some investors expect.
The stock fell as much as 9.4% to US$55.02 ($74.99), below the US$56.10 price it opened at following its Thursday initial public offering. However, it pared much of that decline and ended down 4.5% to close at US$58. Bernstein’s price target of US$46 implies additional weakness.
