BofA Securities cut its price target for Arm Holdings from $460 to $260. This adjustment represents a reduction of over 43%. The firm maintained its Neutral rating on the shares.
Analysts cited elevated valuation as the primary reason for the change. They noted that current stock prices already reflect future growth potential in the AI sector.
BofA acknowledged Arm's strong position to benefit from rising AI demand. Recent results exceeded expectations due to gains in data centers.
Near-term weakness in the smartphone market offsets these strengths. The firm believes the stock is fairly valued at current levels, limiting upside. The adjustment comes amid a wide range of analyst opinions on the company's future.