Arm Holdings: Bank of America believes CPU market share is expected to further expand

LootboxPhobia · 2026-02-24T15:55:55+00:00

Arm Holdings stock price slightly increased, and Bank of America expects it to capture a larger share of the rapidly expanding AI inference market. By fiscal year 2030, its market share is projected to rise to 20-25%. Despite potential losses from authorized sales revenue, Bank of America maintains a neutral rating on Arm and has raised its target price to $140.

LootboxPhobia

2026-02-24 15:55:55

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Investing.com - Arm Holdings stock price slightly rose before the market opened, after U.S. Bank stated that as central processors become increasingly important in data center workloads, the company is expected to capture a larger share of the rapidly expanding AI inference market.

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Analyst Vivek Arya said in a report on Tuesday, “AI inference is control-intensive and requires more CPUs,” adding that CPUs will maintain a stable “about 4-5%” share of the overall AI data center total addressable market (TAM), which U.S. Bank currently estimates to be around $1.4 trillion.

According to U.S. Bank’s forecast, the server CPU market could more than double in size, “by fiscal year 2030, the total addressable market for server CPUs will grow from just $27 billion in fiscal year 2025 to about $60 billion,” with a compound annual growth rate of 17%.

The bank expects nearly 70% of this growth will come from AI servers. In this environment, U.S. Bank believes that “by fiscal year 2030, Arm’s market share could further increase to over 20-25%, higher than our previous estimate of 15-20.”

The bank added that as AI shifts from “pure training to inference,” Arm will benefit because inference relies more on control-oriented CPU performance.

It also highlighted the record-breaking market share growth in Q4 of fiscal year 2025, noting that “Arm also reached a record 11.9% server value share.”

U.S. Bank believes that Arm’s plan to enter the commercial CPU market could significantly expand its addressable market, stating that “through full chiplet technology, Arm’s serviceable available market (SAM) could expand 30-fold.”

However, the bank also warned that the potential loss of “approximately $800 million in annual SoftBank licensing revenue” could offset some medium-term gains.

U.S. Bank reaffirmed its neutral rating on Arm but raised the target price to $140, citing improving long-term CPU market share opportunities.

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