Arm Holdings saw its stock surge on Thursday, climbing 12.7% to $341.28 in New York trading, as positive analyst commentary strengthened the company's connection to Nvidia's expanding AI central processing unit (CPU) efforts. The British chip designer's shares hit an intraday high of $345.49 earlier in the session, reflecting renewed investor enthusiasm for its role in the AI hardware ecosystem.
The rally comes as Nvidia, which reported record first-quarter revenue of $81.6 billion with data-center revenue reaching $75.2 billion, has been highlighting its Vera CPU for agentic AI—systems capable of more autonomous decision-making. According to reports, Vera targets a $200 billion CPU market and could generate $20 billion in revenue for Nvidia this fiscal year, further underscoring the growing importance of CPUs alongside graphics processing units in AI workloads.
Mizuho analyst Vijay Rakesh raised his price target on Arm to $360 from $290, maintaining an Outperform rating. Rakesh cited "tailwinds" as Arm prepares to ramp its own CPU in 2027, pointing to customer chips such as Grace, Vera, Axion, Cobalt, and Graviton. Jefferies analyst Janardan Menon also reiterated a Buy rating with a $290 target, noting that demand for Vera signals increased demand for Arm's AGI CPUs. Menon described Arm's $15 billion AGI CPU revenue goal for 2031 as "conservative."
Arm has been pushing beyond its traditional royalty model. In March, the company introduced its first production silicon, the Arm AGI CPU, naming Meta as its primary partner. CEO Rene Haas stated that "agentic computing is accelerating" a shift in computing architecture, positioning Arm at the forefront of this transformation.
The company posted record fiscal 2026 revenue of $4.92 billion, with royalties contributing $2.61 billion and licensing revenue at $2.31 billion. In its filing, Arm reported that customer demand for the AGI CPU in fiscal 2027 and 2028 now exceeds $2 billion—more than double the figure announced at launch.
Nvidia's Vera CPU is designed to challenge Intel and AMD in the data center market, going head-to-head with their x86 server chips. Early Linux benchmarks on the 88-core Vera show it performing close to AMD's EPYC and Intel's Xeon on selected tasks, according to Tom's Hardware. However, Arm has noted it hasn't secured enough supply to meet all demand for its new AI chip, and the benchmarks were based on Nvidia-selected tests rather than a full range of open workloads.
Arm shares had already been climbing rapidly ahead of Thursday's action, with the stock up about 180% year-to-date as of Sunday, according to The Motley Fool. Barchart later reported that the stock had added roughly 48% over five sessions, trading at high forward multiples.
Investors are viewing Arm as a toll road for the AI-driven expansion of data centers, collecting royalties as its designs are used in a growing number of chips. The real test will come when Vera shipments, Arm's own chips, and new cloud deals start generating the revenue that analysts are banking on.
