Shares of Arm Holdings climbed 13% in premarket trading on Wednesday following positive analyst responses to the company’s inaugural internally designed processor, which industry observers described as a notable broadening of Arm’s business model and a potential driver of long-term earnings growth.
Analysts highlighted both the product itself and the customer commitments that accompanied its unveiling.
Raymond James analysis
Simon Leopold of Raymond James upgraded Arm to Outperform and set a $166 price target, pointing to the company’s strategic shift "to include a fabless semiconductor element." Leopold said this addition "would yield strong operating profit, aid growth and add a new dimension to the strategy." The firm incorporated a revised outlook for Arm, projecting earnings per share of $3 for fiscal year 2028 and $9 by fiscal year 2031.
Raymond James highlighted Arm’s AGI CPU, developed in collaboration with Meta, which the analyst noted Meta intends to deploy alongside its MTIA accelerator. In the firm’s high-end reference configuration, the chip - built on Neoverse V3 cores and a high-bandwidth architecture - was described as delivering "2x the performance of x86 CPUs" and being tailored to agentic AI workloads.
Leopold added that Meta has committed to multiple generations of the design, and that Arm has confirmed additional deployments with Cerebras, Cloudflare, F5, OpenAI, Positron, Rebellions, SAP, and SK Telecom.
Wolfe Research perspective
Wolfe Research analyst Chris Caso characterized the AGI CPU as Arm’s entry into the ">>$100bn merchant CPU market" and estimated the processor could scale to $15 billion in revenue by fiscal year 2031. Caso reported that Arm itself "feels comfortable with in excess of $3 of EPS by FY28," a stance that exceeded his prior estimate.
Both Raymond James and Wolfe Research attributed their more optimistic outlooks to anticipated growth in agentic AI demand and Arm’s expanding roster of customer engagements, which together point to a substantially larger long-term opportunity for the company.
Implications
The analyst notes frame the AGI CPU and confirmed customer deployments as pivotal to Arm’s strategic move into higher-margin silicon offerings, while also underpinning updated earnings scenarios from independent research desks. How those projections materialize will depend on adoption of agentic AI workloads and the commercial ramp of Arm’s new processor family.