TLDR
- Arm Holdings stock jumped 11.07% on Monday to $171.94 following reports that OpenAI is partnering with SoftBank’s Arm to develop data center CPUs
- The collaboration is part of a larger deal with Broadcom where OpenAI will design AI chips while Broadcom handles manufacturing
- Options traders showed strong bullish sentiment with 55,814 calls traded on Monday, double the usual volume, and a low put-call ratio of 0.14
- Analysts maintain a Strong Buy consensus rating with 18 Buy ratings and three Hold ratings
- The company will report Q2 FY2026 earnings on November 5, 2025
Arm Holdings stock closed at $171.94 on Monday after rising 11.07% during the trading session. The move came after reports surfaced that OpenAI is partnering with the chip designer to develop custom server processors.
The Information first reported the partnership between OpenAI and SoftBank’s Arm subsidiary. This collaboration is part of a broader strategy that includes a separate deal with Broadcom.
Under the arrangement, OpenAI will lead chip design efforts while Broadcom handles development and deployment of AI processors. The Arm CPU will manage general computing tasks alongside GPUs in OpenAI’s server infrastructure.
The Broadcom-designed chip will focus on AI inference workloads. Production is expected to begin in late 2026.
Arm stock opened Monday at $154.81 and traded between $157.00 and $175.00 during the session. The pre-market activity on Tuesday showed the stock up 2.65%.
SoftBank Group owns a majority stake in Arm Holdings. The Japanese conglomerate has been arranging a margin loan backed by Arm shares to fund additional OpenAI investments.
Options Activity Signals Strong Sentiment
Monday saw heavy trading in Arm options with 55,814 calls changing hands. That volume was twice the typical daily average for call options on the stock.
The put-call ratio stood at 0.14, indicating traders were buying calls at a much higher rate than puts. Calls are contracts that profit when a stock rises, while puts profit from declines.
This lopsided ratio suggests traders expect further upside in Arm shares. The options market often provides clues about near-term sentiment among active traders.
The stock has been volatile in recent months. Arm surged during a tech rally that started in April but lost momentum after releasing mixed Q1 fiscal 2026 results on July 30.
Investors were disappointed by guidance that seemed conservative given the stock’s high valuation. The company trades at roughly 260 times trailing earnings.
Recent Performance and Upcoming Catalysts
Arm’s 52-week range sits between $80 and $182.88. The Monday close of $171.94 puts the stock near the upper end of that range.
The stock has gained approximately 23% over the past two weeks. Monday’s trading volume spiked to around 10-11 million shares, well above normal levels.
The 50-day moving average sits at roughly $144, while the 200-day moving average is around $136. The stock is trading well above both technical indicators.
In its most recent quarter, Arm reported revenue of $1.05 billion and earnings per share of $0.35. Royalty revenue, which comes from chip shipments by licensees, rose 25% to $585 million.
The company has been emphasizing its v9 architecture and AI-optimized designs. Qualcomm announced in September it would use Arm’s v9 architecture in upcoming smartphone chips.
Wall Street Maintains Positive Outlook
Analysts covering Arm Holdings have issued 18 Buy ratings and three Hold ratings over the past three months. That creates a Strong Buy consensus among the analyst community.
The average price target stands at $172.28 per share. That’s essentially in line with current trading levels, suggesting analysts see the stock as fairly valued at these prices.
Individual price targets range from around $100 to $225 depending on the firm. Morgan Stanley recently maintained a $171 target, while Evercore ISI holds a $178 target.
The market capitalization now sits between $164 billion and $182 billion. That’s larger than SoftBank’s book value despite SoftBank owning a majority of Arm’s shares.
Arm will report Q2 fiscal 2026 earnings on November 5. That report will provide updated guidance and details on recent licensing wins and product development.
The OpenAI partnership represents another validation of Arm’s position in the AI chip market as major tech companies build out data center infrastructure for artificial intelligence workloads.
The post Arm Holdings (ARM) Stock: OpenAI Partnership Sends Shares Soaring appeared first on Blockonomi.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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