Arm Holdings plc

AI-generated fair value estimate for this company.

Method: 10-year unlevered FCF DCF: $1.5B forward normalized FCF base (reflecting AI/datacenter royalty ramp above FY2026's $979M reported FCF); 25% growth yrs 1-5, 15% yrs 6-10; 8% discount rate; 4% terminal growth; ~$3.4B net cash; 1.07B shares outstanding.

Reasoning: Arm's royalty base is inflecting sharply on AI compute (v9/CSS licensing, custom silicon deals), justifying above-market growth for a decade before fading to GDP-plus growth; the resulting value sits well below the current ~$332 market price, reflecting DCF skepticism that hyper-growth royalty rates persist that far out.