Why BofA Just Turned Neutral on Arm Holdings plc (ARM)

Arm Holdings plc (NASDAQ:ARM) is among the most promising growth stocks according to analysts. On January 13, Vivek Arya at BofA downgraded Arm Holdings plc (NASDAQ:ARM) to ‘Neutral’ from ‘Buy’ and maintained a $120 price target, according to TheFly. The analyst believes global smartphone units could witness a dip in the low single digits YoY due to high memory costs and supply issues, which will adversely impact ARM Client royalty sales.

Since Reuters announced that Arm Holdings plc (NASDAQ:ARM)’s restructuring to create a Physical AI unit to strengthen its position in the robotics space, the stock has declined by nearly 3%. According to the statement by executives, the company will now operate through three segments: Cloud and AI, Edge, and Physical AI.

Earlier, on December 16, 2025, BofA reduced the price target on Arm Holdings plc (NASDAQ:ARM) to $145 from $205 and maintained a ‘Buy’ rating on the stock. Despite the firm being confident about the smartphone and data center v9/CSS adoption and content expansion, the enhanced SoftBank contribution and dependence to achieve its growth outlook for the foreseeable future raises concerns. BofA also notes the limited visibility into the new CPU chipset/silicon business.

Arm Holdings plc (NASDAQ:ARM) is a U.K.-based semiconductor and software design company that designs central processing unit (CPU) products and associated technologies. Incorporated in 1990, the company offers its solutions to semiconductor companies and original equipment manufacturers.

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