UBS and TD Cowen Significantly Raise Arm's Target Price, Betting on AI Data Center CPU Value Reassessment

BlockBeats News, June 25th. This week, Arm's stock price followed a pullback in the high-valuation AI sector. However, some Wall Street analysts believe that this adjustment has not changed the company's long-term position in AI data centers.

UBS raised Arm's target price significantly from $260 to $470, maintaining a Buy rating. TD Cowen also raised the target price from $265 to $475, likewise maintaining a Buy rating. The common view of the two institutions is that with the development of agentic AI, the importance of CPUs in data center architecture may rise, rather than GPUs continuing to dominate the investment narrative.

TD Cowen believes that in the long term, CPUs may have a better strategic position in certain AI workloads. UBS, on the other hand, emphasizes that the market is truly debating the revenue potential of Arm's self-developed or standalone CPU business. The bank expects Arm-related CPU revenue to reach approximately $14 billion by 2030, although the company itself has stated that this business will not have a substantial financial impact until the 2028 fiscal year. Arm's advantage lies in low latency and energy efficiency, which are increasingly important metrics that major cloud providers are focusing on in AI infrastructure expansion. Despite the short-term price pullback from its highs, analysts still view Arm as one of the key beneficiaries in the server CPU upgrade cycle.