Arm Holdings leads AI data center CPU growth with strong revenue but faces high valuation risks.

Arm Holdings has become a key player in AI data center CPUs, with revenue up 22% year-over-year and data center royalty revenue doubling. Despite strong growth and a bullish price target of $265.32 (about 11% upside), the stock trades at a high forward P/E of 115, reflecting valuation concerns. Demand for Arm's AGI CPU has doubled to over $2 billion, with major customers like Meta and OpenAI. Risks include a pending Qualcomm lawsuit and exposure to China amid export controls. Analysts recommend buying on dips, expecting continued growth if Arm maintains its market share and royalty growth.