ARM has added another 25% this week alone, closing at $402.71 — and the gap between where the stock trades and where the Street thought it was going has never looked wider.
The analyst community is scrambling to keep up. Barclays lifted its target from $250 to $360 on June 1 while holding Overweight. Wells Fargo went further, raising to $410. Mizuho was already ahead of both — it had moved to $360 on May 28, then bumped again to $425 just days later. The direction of travel is unanimous: every recent action has been a raise, every rating a buy or outperform. The lone holdout is Goldman Sachs, which maintained its Sell on May 7 and raised its target only to $150 — a level the stock blew through weeks ago. Even after all these upgrades, the consensus mean price target sits near $241, roughly 40% below where the stock is trading. ARM has simply outrun the models. The Street is now in catch-up mode, not leading it.
The bull case centres on royalty growth: Arm has guided for 20% CAGR in royalty revenue through fiscal 2031, driven by Armv9 adoption and its new ARM AGI CPU, which could contribute $15 billion in revenue by that year. The addressable market for cloud AI is projected to grow from $330 billion in FY2026 to over $1.2 trillion by FY2031. Bears flag the company's reliance on SoftBank — which still controls 86.4% of shares — and warn that raising royalty rates risks alienating the very customers ARM depends on. The EV/EBITDA multiple has compressed slightly over the past month but still runs at 131x. The P/E is 158x. These are valuations that demand the AI growth story arrives on schedule, every quarter.
Short sellers have been adding quietly into the rally. Estimated short interest climbed 17% over the past week to around 18.5 million shares — the highest level in months. That is a notable build: bears who held through a 90% one-month move are not capitulating; they are adding. Yet the borrow market tells a different story about urgency. Cost to borrow is just 0.46%, easing slightly on the week. Availability has tightened — from around 289% two weeks ago to 208% now — but remains well above the 52-week low of 20%. The short score has edged up to 60.5, its highest reading of the recent period, but is still far from the kind of extreme that signals organised squeeze pressure. This looks like stubborn, expensive-conviction shorts, not a crowded panic.
Insiders have been selling throughout the move, and the pace has not slowed. The CFO sold nearly 32,000 shares at $226 on May 20 for over $7.2 million. The Chief Legal Officer sold 40,941 shares at $215 on May 19 for $8.8 million. The Chief Commercial Officer sold multiple tranches across May 20–28. None of these disposals were flagged as high significance — trade scores were all low — and some may reflect pre-arranged plans. Still, the net picture is clear: executives were selling into a stock they knew had just doubled. The current price is at least $75 above where any of them sold.
The peer group adds context. MRVL gained 32.5% on Tuesday alone and is up nearly 40% on the week. MX added 30.7% over the same period. The entire semiconductor complex is moving, and ARM is riding that wave as much as driving it. Next earnings are scheduled for July 29. The last print delivered a 2.1% next-day move and a 5.9% five-day gain. The one before that, in March, moved the stock 14.7% in a single session. With the stock this far above consensus targets and short sellers quietly rebuilding positions, the July print is now the next real test of whether the AI royalty growth story is tracking ahead of, or merely in line with, the market's freshly elevated expectations.
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