Arm Holdings: BofA now sees potential for greater CPU share

Investing.com -- Arm Holdings shares edged higher premarket after Bank of America said it believes the company is positioned to take a larger share of the fast-expanding AI inference market as central processing units become increasingly important in data-center workloads.

Analyst Vivek Arya said in a note Tuesday that “AI inference is control-heavy, requires more CPUs,” adding that CPUs will remain a stable “~4-5% share of overall AI data center TAM,” a market BofA now estimates at about $1.4 trillion.

According to BofA, the server CPU market could more than double, with “server CPU TAM reaching ~$60bn by CY30E from just $27bn in CY25,” growing at a 17% compound annual rate.

The bank expects nearly 70% of that total to come from AI servers. In that environment, BofA sees “potential for greater ARM share gain toward 20-25%+ by CY30E, up from our prior 15-20% outlook.”

The bank adds that Arm is set to benefit as AI shifts “away from just training and toward inference,” which relies more heavily on control-oriented CPU performance.

It also highlighted record Q4 2025 share gains, noting that “ARM also reached a record 11.9%” server value share.

BofA believes Arm’s planned move into merchant CPUs could significantly expand its addressable market, saying “ARM’s SAM could be 30x” with full chiplets.

But it also cautioned that a potential loss of “current ~$800mn/yr SoftBank licensing sales” could offset some medium-term benefits.

BofA reiterated its Neutral rating on Arm but raised its price target to $140, citing the improving long-term CPU share opportunity.

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