Arm Holdings Plc (ARM US): Hold: Bullish AGI CPU tone but upside uncertainty remains

研报英文原文证据摘录

Arm Holdings Plc (ARM US): Hold: Bullish AGI CPU tone but upside uncertainty remains

ance of 20% y-o-y growth. Arm

490.00

highlighted that datacenter royalty revenue is still the largest driver of royalty revenue

growth driven by 1) continued ramp of Arm based server chips at major hyperscalers; 276.00

and 2) increasing deployments of Arm based datacenter networking chips (DPUs and 62.00

smart NICs). Management blamed the lowering of royalty revenue guidance on 07/25 01/26 07/26

Target price: 230.00

smartphones – with both units and mix contributing to the weakness. High: 439.46 Low: 104.55 Current: 224.89

Source: LSEG IBES, HSBC estimates

Bullish tone on AGI CPU upside still unsubstantiated: In our July 14 Downgrade to

Hold note, we highlighted that upside to Arm’s AGI CPU revenue target of USD1bn Frank Lee*

through FY27-28 is dependent on the easing of foundry capacity constraints, which Global Head of Tech Hardware & Semi Research

The Hongkong and Shanghai Banking Corporation Limited

seemed unlikely. Management expects demand for their AGI CPU now exceeds frank.lee@hsbc.com.hk

USD2bn and they have increasing confidence on procuring additional supply to deliver +852 2996 6916

upside to their USD1bn target. However, management has not actually raised their AGI Pulkit Aggarwal*

Associate

CPU revenue guidance despite more bullish tone given ongoing uncertainty over Bangalore

foundry capacity constraints. We continue to believe that upside to AGI CPU revenue

could be the biggest catalyst to earnings upside and remains the key focus of investors. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

Retain Hold; cut TP from USD315 to USD230: We slightly cut our FY28/FY29 EPS

estimates by 4%/3%.