Arm Holdings Plc (NASDAQ:ARM) stock fell Tuesday after HSBC downgraded the stock, adding to pressure from a broader pullback in AI and semiconductor stocks as investors took profits in richly valued names.
The decline came despite mixed analyst commentary, with HSBC turning more cautious even as KeyBanc became more bullish on Arm's long-term growth prospects.
HSBC Flags Valuation Risks HSBC analyst Frank Lee downgraded Arm to Hold from Buy while raising his price forecast to $315 from $255.
The analyst said enthusiasm surrounding Arm's expanding role in CPUs has pushed the stock well ahead of fundamentals.
While Lee acknowledged the company's long-term growth opportunity, he argued that much of that upside is already reflected in the share price, leaving limited near-term upside.
