Morgan Stanley Trims Price Target on Arm Holdings (ARM) to $171, Keeps Overweight Rating

Arm Holdings plc (NASDAQ:ARM) is one of the AI Stocks Every Investor Should Watch. On October 9, Morgan Stanley lowered the firm’s price target on the stock to $171 from $180 and kept an Overweight rating on the shares.

Although the overall outlook on the stock is positive, the firm adjusted its estimates for Arm’s fiscal year 2027, leading to the price target reduction.

Morgan Stanley highlighted that even though operating expenses have expanded, income from royalties and licensing income will support Q2 earnings.

Therefore, it sees “an attractive entry point” based on its long-term prospects for custom chip development and core business growth.

Arm Holdings plc (NASDAQ:ARM) is a semiconductor and software design company that designs and manufactures semiconductor technology and other related products.

While we acknowledge the potential of ARM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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