Susquehanna upgraded Arm Holdings to a Positive rating, citing new data center projects and higher per-device royalties. The chip designer's shares have dropped 30% in six months amid weak smartphone and PC demand, but analysts believe these headwinds are now priced in. The firm holds a $150 price target for the stock.

Arm is expanding beyond central processors into AI accelerators, reportedly collaborating with SoftBank and Broadcom on a custom chip for OpenAI. The 'Titan-1' project could begin ramping in late 2026, potentially generating over $1 billion in annual royalty revenue. Major cloud companies are also adopting Arm-based processors, which command higher payments per chip.

The company is offsetting softer unit volumes by charging more per device. Chipmakers are migrating from Arm’s older v8 architecture to the newer v9 standard, which carries roughly double the royalty rate. Adoption of v9 remains below peak levels, leaving room for further gains in 2026. Arm is also pushing more integrated designs that command even higher fees from partners like Samsung and Xiaomi.