15 AI News Investors Should Not Miss

12. Arm Holdings plc (NASDAQ:ARM)

Number of Hedge Fund Holders: 38

Arm Holdings plc (NASDAQ:ARM) is a multinational semiconductor and software design company that designs microprocessors, physical Internet protocol (IP), and related technology and software, and sells development tools. Arm Holdings is an AI stock because its advanced semiconductor designs power many AI applications, from edge devices to data centers, driving the AI revolution.

On Thursday, October 31, Investment firm Bernstein downgraded Arm Holdings plc (NASDAQ:ARM) to “Underperform” from Market Perform and kept a price target of $100. This downgrade stems from worries about the company’s revenue prospects outside of artificial intelligence. Analyst Sara Russo said most things artificial-intelligence related are “holding up fine”, supporting royalty rates for Arm’s v9 architecture in both mobile and data centers. However, anything beyond is still a concern.

“While the story has remained relatively unchanged in an overall gloomy semiconductor environment (beyond AI), Arm’s share price has rallied nearly 40% since our upgrade less than a quarter ago. The long term equity story remains very appealing: strong v9 penetration, share gain in datacenter and incremental CSS benefits–but at what price? Despite using a generous and merited 45x FY26 P/E, we struggle to find upside.”

– Analyst Sara Russo wrote in a note to clients