Arm Holdings plc
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Arm's fundamental franchise remains exceptional — FY2026 revenue of $4.92B grew 22.8% YoY with 92.5% gross margins and $979M in free cash flow — but the valuation at 283.8x trailing earnings, roughly 551% above the peer median P/E of 43.6x, prices in years of flawless execution with no margin of safety.
The latest quarter (Q1 FY2027, ended 30 Jun) showed operating income of $98M versus $107M a year earlier despite 22.4% revenue growth, signaling operating-margin pressure that undercuts the profitability narrative. Insiders have been net sellers to the tune of $69.5M over the trailing 24 months with zero open-market purchases, and the technical picture has weakened with a bearish MACD histogram of -2.12. The AI-driven growth thesis is intact, but the risk/reward at $275.29 is unfavorable given the extreme valuation premium and emerging margin headwinds.
What could go wrong
- Valuation de-rating. At 283.8x P/E and 57.0x P/S — roughly 551% and 481% above peer medians respectively — any growth deceleration or AI-narrative disappointment could trigger a sharp compression in multiples.
- Operating-margin compression. Q1 FY2027 operating income of $98M fell below the prior-year quarter's $107M despite 22.4% revenue growth, suggesting rising cost pressures or investment cycles that erode operating leverage.
- Competitive threat to Windows-on-Arm. Microsoft's push of agentic AI onto laptops creates uncertainty around Arm's Windows ambitions and could blunt the data-center and client royalty repricing story.
- Persistent insider selling. Zero open-market insider acquisitions and $69.5M in net dispositions over 24 months, including recent CFO sales at $255–$300, signal limited executive conviction at current valuations.
What would change my mind
Where this comes from: FY26 fundamentals · peer comparison · Q1 FY27 results · insider trades, last 24 months. Orin's read on ARM; not advice.
How has the share price moved?
Up 26.9% over twelve months, from $178.62 on 27 Oct 2025 to $226.60 at the Tue 27 Oct 2026 close. Its highest close in that time was $439.46 on 18 Jun 2026; the last close is 48.4% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 34.2M, on 18 Jun 2026).
On file
All ARM filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 13G | 14 Feb 2024 | — | on file |
Largest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Invesco | $4.5B | 0.4% |
| DZ BANK AG Deutsche Zentral Genossenschafts Bank, Frankfurt am Main | $2.3B | 1.8% |
| Capital World Investors | $1.5B | 0.2% |
| FMR | $1.4B | 0.1% |
| Goldman Sachs Group | $1.0B | 0.1% |
| Capital Research Global Investors | $851.4M | 0.1% |
| Morgan Stanley | $765.3M | 0.0% |
| BlackRock | $721.9M | 0.0% |
| Franklin Resources | $717.7M | 0.2% |
| Altimeter Capital Management | $582.2M | 5.9% |
90 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 124 Form 4 filings; open-market trades net −$69.5M. Of the 50 on hand, 0 were open-market purchases and 15 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about ARM
Orin answers questions about ARM from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 192× its last 12 months of profit (Thu 5 Nov close); the typical Technology company on the NASDAQ is at 46.1×. It has too few years of its own for a usual level.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 192× | — | 46.1× |
| P/S | 32.6× | — | — |
| EV/EBITDA | 135× | — | — |
| P/B | 19.6× | — | — |
- Listed on 14 Sep 2023 — earlier years are not shown.
- So it has no full fiscal year of its own on file yet — no usual level.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $376 (from $250 to $641) — 66% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$376
$250 – $641 · +66% against the last close
- 16 buy or overweight
- 6 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 192× its last 12 months of profit; the middle P/E of the 4 companies it is compared to that made a profit is 62.1×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ARMArm Holdings plc American Depositary Shares | $178B | 192× | 135× | 95.4% | 17.1% | 11% |
| ADIAnalog Devices, Inc. | $206B | 50.2× | 30.3× | 65.8% | 29.8% | 12% |
| MPWRMonolithic Power Systems, Inc. | $60B | 73.9× | 56.1× | 55.2% | 24.4% | 22% |
| RMBSRambus Inc. | $10B | 36.1× | 26.4× | 79.1% | 33.4% | 19% |
| SNPSSynopsys, Inc. | $91B | 82.4× | 26.3× | 72.4% | 11.4% | 4% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 192× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now192×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $8 a share — 97% below the $225.94 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $8 | 97% below $225.94 |
| Levered | $9 | 96% below $225.94 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.