Arm Holdings shares dip after Q1 EPS miss but AI demand keeps growth hopes alive.

Arm Holdings reported its third consecutive year of over 20% revenue growth, driven by strong demand for its AI-focused compute platform. Despite a Q1 EPS miss and a drop in operating margin, the company has over $2 billion in contracted demand for its AGI CPU from major tech firms. Shares have fallen recently but still show a 146% gain year-to-date. Analysts see modest upside with a consensus target near $288, while a bull case envisions a rise to $426. Reaching $450 per share would require significant multiple expansion and margin recovery, with risks including a pending Qualcomm litigation ruling. Continued AI investment and hyperscaler adoption are key to Arm's growth trajectory.