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Astera Labs recently announced a collaboration with Arm Total Design to integrate its Intelligent Connectivity Platform with Arm Neoverse Compute Subsystems, aiming to streamline custom AI infrastructure chiplet solutions for clients seeking multi-protocol connectivity.
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This move highlights Arm Holdings’ expanding influence across the AI hardware supply chain, signaling growing adoption of its technologies in custom architectures beyond traditional markets.
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We’ll explore how Arm’s new partnerships in AI data center hardware may impact the company’s long-term investment case and market positioning.
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To be a shareholder in Arm Holdings, you need conviction that Arm’s ongoing expansion into AI infrastructure and custom chip solutions can successfully offset potential saturation in its core smartphone markets. The recent Astera Labs collaboration strengthens Arm’s industry partnerships but does not materially change the near-term focus on ramping AI data center design wins as the main catalyst, nor does it resolve the execution risks tied to diversification and rising R&D expenses.
Among recent announcements, the partnership with Astera Labs is the most relevant because it boosts Arm’s ability to embed its Neoverse Compute Subsystems in next-generation AI hardware. This underscores Arm’s growing footprint in custom architectures, directly tying into the current catalyst of gaining AI data center share, even as execution risk, particularly in new, complex verticals, remains front of mind for investors.
Yet, it’s worth contrasting that expanded opportunity with the ongoing risk that major customers could…
Read the full narrative on Arm Holdings (it’s free!)
Arm Holdings’ narrative projects $7.4 billion revenue and $2.3 billion earnings by 2028. This requires 21.5% yearly revenue growth and a $1.6 billion earnings increase from $699 million currently.
Uncover how Arm Holdings’ forecasts yield a $155.61 fair value, a 9% downside to its current price.
Compared to the consensus, the most optimistic analysts see Arm’s data center share soaring and forecast US$8.6 billion in revenues by 2028. They expect Arm’s industry partnerships and AI momentum could drive revenue and margin acceleration, though emerging competition and rising R&D costs suggest these bullish assumptions might face more volatility. As you weigh your own view, keep in mind just how wide the range of possible futures for Arm could be.