Stock Analysts See Upside Potential for Arm and Upstart Shares

Stock analysts suggest buying shares of Arm Holdings and Upstart Holdings due to implied upside potential, despite recent price declines. With Arm expected to grow 23% revenue and Upstart seeing strong demand, both present opportunities for investors.

Date: 25-03-2025

AI Rating: 6

Analyst Ratings and Future Potential

Both Arm Holdings (NASDAQ: ARM) and Upstart Holdings (NASDAQ: UPST) are highlighted in the report for their potential upside despite recent declines in their stock prices. Arm shows a considerable upside of 42% based on analysts' target prices, while Upstart has a 57% upside potential. These figures suggest that both stocks may be undervalued in the current market environment.

Arm Holdings Metrics

For Arm, quarterly performance indicates a revenue increase of 19% year-over-year to $983 million, showcasing strong demand driven by energy-efficient computing fueled by AI technologies. The non-GAAP net income also rose by 26% to $0.39 per diluted share. However, it is essential to note that Arm narrowed its future guidance, indicating expected revenue growth of 23% and net income growth of 26%. While the anticipated growth rates are favorable, concerns may arise regarding the narrower guidance affecting investor sentiment.

Upstart Holdings Metrics

Upstart's results show an impressive revenue growth of 56%, bringing total revenue to $219 million with a move to non-GAAP net income of $0.29 per diluted share, compared to a loss previously. This positive trajectory indicates that Upstart is recovering well from previous downturns caused by the macroeconomic environment. Furthermore, Upstart expects to maintain a revenue growth rate of 56% in 2025, placing it well within a growth phase despite potential risks associated with inflation and interest rates affecting consumer demand. The report suggests that Upstart is tapping into a massive $2 trillion total addressable market in loan originations, signifying significant future growth opportunities.

Overall, while the performance metrics for both companies indicate positive growth trajectories, investors should monitor external economic factors that could impact stock performance. Given the upward forecast and current valuations, these stocks are positioned as appealing investment opportunities in the face of market volatility.

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