Mizuho analysts said in a note Wednesday that the firm has raised its price target for Arm Holdings (NASDAQ:ARM) to $75 from $62 per share, maintaining a Buy rating on the stock.
The analysts told investors that they are raising their estimates for the stock as AI is driving the adoption of higher-performance chips.
"We believe Arm Holdings remains a key semiconductor IP enabler, benefiting from long-term secular trends for increasing processor efficiency and AI," wrote the analysts.
They said a Total Compute Solution platform enables new opportunities with China handset OEMs building their own processors, with potential Samsung Exynos 2400 in the second half of 2024, representing tailwinds for ARM.
"We believe ARM could open new doors in the handset space, as it could potentially enable Tier-1 China handset OEMs, with its TCS23, to build their own 'Snapdragon chips,'" they explained.
In addition, the analysts noted the "new AI Compute Custom ARM silicon from MSFT with Cobalt 100/200/300 and NVDA Grace tailwind into 2024- 25E."
"ARM is driving a sticky, expanding ecosystem at scale, shipping ~35B units/ yr, with 60% of all semiconductor IP on ARM," added the analysts.