(CercleFinance.com) – Susquehanna started coverage of Arm stock on Friday with a ‘neutral’ opinion and a price target of $48, believing that the chipmaker was reaching the end of its business model.
In a note sent to its clients, the broker recognizes that the British group has been able to create a market around low-power processors, thus opening the doors to hyperscale computing and microcontrollers for automobiles.
The broker emphasizes, however, that its main market, that of mobile phones, is now showing zero growth in terms of volumes while its second outlet, automobiles, is also nearing saturation.
Beyond the slowdown in its end markets, Susquehanna says it is concerned about the risks surrounding the evolution of its royalty-based model and the possibility of a contraction in its margins due to the need to expand into other markets.
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