Arm Extends AI Reach From Data Centers To Edge Devices

Piper Sandler initiated coverage of five AI chip stocks, rating them Overweight. Nvidia (NVDA) was given a $300 price target, with an 80% market share in AI compute. Broadcom (AVGO) was started at $460, with a 75% share in custom ASIC chips. AMD (AMD) was initiated at $600, with a 65% earnings growth forecast. Marvell (MRVL) and Arm Holdings (ARM) were also covered, with price targets of $270 and $320, respectively.

Arm updated its mobile, cloud, and AI product lines, expanding into the cloud segment with the Neoverse CSS N4 and AGI CPU. The company reported Q1 2027 revenue of $1.289B, up 22.4% YoY, with licensing and royalty revenues at $574M and $715M respectively. Arm is extending its business model to offer more complete products, aiming to capture new growth opportunities in AI. Chinese companies like Volcano Engine and Lenovo are adopting Arm's AGI CPU for AI services and infrastructure.

Citi raised its chip sector outlook, predicting the CPU market will grow to $237B by 2030. Intel and AMD shares surged 9.8% and 6.6% respectively, while ARM Holdings' U.S. shares gained 4.7%. Citi expects AMD to be the primary beneficiary of CPU growth, with Intel as a secondary beneficiary. The broader semiconductor rally also boosted optical technology stocks like Coherent and Lumentum.

Novartis NOVN shares fell 9% after reporting three drug trial failures, impacting rivals Amgen AMGN and Eli Lilly LLY. Sandisk SNDK shares rose 12% ahead of S&P 100 inclusion. EverBank and WaFd WAFD agreed to a $3.9B reverse merger. Brent crude approached $100/barrel due to Strait of Hormuz tensions. Gold prices dropped over 2% on strong U.S. payroll data.

Arm Holdings introduced next-gen mobile and server platforms, including a mobile chip with an AI accelerator and a server design doubling performance. The company also supports Samsung's 2nm process and announced partnerships with Oracle and ByteDance for its AGI CPU. Arm aims to expand into physical AI, targeting a $200B market by the 2030s.

ARM seeks shareholder approval for a CEO pay package worth up to $800 million if the company reaches a $2 trillion valuation. Proxy advisors ISS and Glass Lewis recommend rejecting the plan, calling it excessive. ARM argues the pay structure is competitive with US tech firms. SoftBank, with an 86.4% stake, may influence the vote.