Arm Holdings Stock Skyrockets Monday: Here’s the Fuel Behind the Rally

Semiconductor darling Arm Holdings saw its shares surge like a meme coin on steroids Monday—leaving Wall Street scrambling for explanations. Was it AI hype, earnings whispers, or just traders chasing momentum? Let’s break it down.

Chip Power Play: Arm’s energy-efficient designs are the secret sauce in everything from smartphones to data centers. When tech giants sneeze, Arm catches a cold—or in this case, a windfall.

Short Squeeze Suspicion: With short interest hovering near 5% of float, bears got steamrolled by bullish momentum. Nothing fuels a rally like panic buying from hedge funds caught on the wrong side.

Macro Mirage?: Some analysts credited the Fed’s dovish whispers… but let’s be real—this is a stock that trades at 35x sales. Since when did fundamentals matter?

One thing’s clear: In a market where ‘expensive’ is just a suggestion, Arm’s pop proves money still flows to perceived innovators. Even if their valuation looks like a dot-com fever dream.

Getting stronger through diversity

Early that morning, Seaport Global Securities' Jay Goldberg initiated coverage of Arm Holdings with an unambiguous buy recommendation, at a price target of $150 per share.

Image source: Getty Images.

According to reports, Goldberg is convinced that Arm is creating significant value with its business. It has successfully pivoted from a mobile-focused company into one that is well diversified and drawing revenue streams from numerous sources.

The analyst pointed out that Arm is notably strong in a customer segment well poised for significant growth: data centers. These facilities are being fitted out to better serve the artificial intelligence (AI) functions that require far more computing power than preceding technologies.

Another aspect of the company's business that Goldberg admires is its offerings for the automotive industry. While he noted that this market has a long development cycle, he wrote that Arm has already tripled the addressable market for products in the segment.

Life in the investor doghouse

The analyst's timing is interesting because Arm hasn't exactly been the flavor of the month for investors. At the start of August it published its results for the first quarter of fiscal 2026, which were met by disappointment despite a double-digit rise in revenue. Monday's reaction to Goldberg's bullish note might presage something of a revival in the shares.