Arm Holdings stock shot up 14% in premarket trading on Monday after Nvidia unveiled its RTX Spark PC superchip at GTC Taipei. The chip uses a custom CPU design built by MediaTek, which is based on Arm architecture.
Arm Holdings plc American Depositary Shares, ARM
The move added to what has already been a stunning year for ARM stock. It has more than tripled year-to-date and was trading around $353, near its 52-week high of $356.45.
Nvidia barely mentioned Arm in its press release. The single reference noted that MediaTek “collaborated with Nvidia on the custom CPU design.” Despite the low-key credit, investors quickly connected the dots.
The announcement also lifted SoftBank, ARM’s majority owner, which climbed over 14% and became Japan’s top company by market cap.
Meanwhile, the news weighed on other chip names. Intel fell more than 5% and AMD dropped around 0.4%, as the market read the RTX Spark launch as a competitive threat to existing PC chip players.
Nvidia CEO Jensen Huang said the chip will let autonomous AI agents run on Windows PCs. He described laptops becoming capable of combing through files, doing research, and answering user questions without cloud connectivity.
“One hundred percent of the world’s PC industry has joined us to reinvent the PC,” Huang said in his keynote.
Mizuho raised its ARM price target to $425 from $360 on Monday, keeping its Outperform rating. That new target is based on 2.7 times the firm’s fiscal 2028 estimate.
The bank flagged some near-term headwinds in lower-end handsets but said premium and flagship devices are showing strength. It also pointed to CPU ramp activity from key customers including Cobalt, Axion, Graviton, Vera, and Grace as near-term tailwinds.
Mizuho added that Arm’s in-house AGI CPU and a potential ASIC could begin ramping in 2027 and 2028. According to InvestingPro data, 19 analysts have revised their earnings estimates upward for the upcoming period.
ARM trades at a P/E ratio of 412, reflecting high growth expectations already baked into the price.
The idea of AI PCs is not new, and Arm has been involved in AI PC chip development before this announcement. What’s different now is the partnership with Nvidia, the world’s largest company by market cap, alongside major PC vendors Dell and HP.
Evercore recently reiterated its Outperform rating on ARM, pointing to a 140 basis point gain in server CPU market share in Q1 2026. Intel’s server CPU market share fell from 59% to 55% over that same period.
Arm CEO Rene Haas is scheduled to give his own keynote at Computex on Tuesday, where further details on Arm’s AI roadmap are expected.
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