1 Wall Street analysts believe Arm Holdings shares will reach $135. Should I buy?

As far as possible, Gwen is based onArm Holdings, Inc. (NASDAQ: ARM)Chips based on this technology dominate a number of markets, including smartphones, but it's not enough to make a difference.KeyBancAnalysts are excited about the opportunity for the company to expand its presence in the data center and PC market.

At the beginning of this week, KeyBanc reiterated its "Hold" rating on Arm, while raising its price target from $120 to $135. From the current price, the new target indicates upside of 6.5% over the next 12 months or so. At current prices, the new target suggests upside of 6.5% over the next 12 months or so. Arm's stock price has been soaring so far this year, and KeyBanc believes the upward trend will continue.

Entering the data center and personal computer

In the data center.Intel(math.) andAdvanced Micro DevicesThe x86 chips have dominated the market, but that's starting to change as artificial intelligence (AI) becomes a major driver. However, this is starting to change as artificial intelligence (AI) becomes a major microdrive. gpu giantsNvidiaKeyBanc is pushing its so-called "superchips," which combine its powerful GPU cores with Arm CPU cores tuned for data center workloads, and KeyBanc expects the March release of the Nvidia GB200 chip to boost Arm's position in the data center market.

PCs are another opportunity.Apple Inc.The company uses a customized Arm processor on its Mac computers, and nowMicrosoftrespond in singingQualcommWe're also hoping for a breakthrough on the Windows side of the equation. Qualcomm's Arm-based Elite X PC chip will be available later this year, and early benchmark results look promising.

The tricky thing about Arm PCs is that they have to run most standard Windows programs smoothly in order to convince consumers that they are a viable option. Apple uses an imitation layer for its Arm-based Macs, and it remains to be seen how well a similar setup will run on Windows. Some progress has been made in getting developers to create applications specifically for the Arm:Alphabet a Google company, recently launched a version of Chrome optimized for Arm-based systems.

Is Arm stock worth buying?

While Arm has the potential to win market share in the data center and PC markets, its stock price is already prohibitively high. with a forward price-to-earnings ratio of well over 100 times, Arm stock looks extremely risky despite the company's growth potential.

Should you invest $1,000 in Arm Holdings now?

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Alphabet CEO Suzanne Frey is a member of The Motley Fool's Board of Directors. Timothy Green owns shares of Intel Corporation, and The Motley Fool owns and recommends shares of Advanced Micro Devices, Alphabet, Apple, Microsoft, Nvidia, and Qualcomm, Inc. The Motley Fool recommends the following options on Intel: Intel January 2023 $57.50 Call Option Long, Intel January 2025 $57.50 Call Option Long, and Intel January 2025 $57.50 Call Option Long, and Intel January 2025 $57.50 Call Option Long. The Motley Fool recommends the following options: Intel January 2023 $57.50 Call Options Long, Intel January 2025 $45 Call Options Long, Microsoft January 2026 $395 Call Options Long, Microsoft January 2026 $405 Call Options Short and Intel May 2024 $47 Call Options Short. The Motley Fool has a disclosure policy.

1 Wall Street Analyst Believes Arm Holdings Shares Will Rise to $135 Originally published by The Motley Fool.