Citigroup: Arm continues to be considered as the main beneficiary of AI infrastructure at a target cost of $300

On 30 July, Citi released a report that Arm published performance for the first quarter of fiscal year 2027, with revenues and profits expected to be 1 per cent and 11 per cent higher than the market, while the median income and profit guide for the second fiscal year was 3 per cent and 10 per cent higher, respectively. The strong growth of cloud-end AI and authorized business has helped offset the weakening of the mobile phone market due to demand and product mix. The Bank increased its revenue and operating surplus projections for the 2027 fiscal year by 1 per cent and 4 per cent, respectively, and management noted that General Artificial Intelligence (AGI) CPU demand had exceeded $2 billion and that business visibility was improving, and therefore continued to view Arm as the main beneficiary of AI infrastructure, believing that the recent stock price reversal would provide more attractive entry opportunities and maintain the “buy-in” rating at a target price of $300. Citicorp increased the revenue projections for the fiscal years of Arm 2027 to 2030 by about 1 per cent to reflect the strong authorized business, offset in part by the weaker patent revenues for mobile phones; the profit projections for the fiscal years 2027 and 2029 increased by 4 per cent and 1 per cent, respectively。