Morgan Stanley says semiconductor manufacturer Arm Holdings could be a key player in the rise of “edge artificial intelligence.” Edge AI refers to deploying artificial intelligence models and machine learning on local devices, such as sensors or IoT devices, rather than in the cloud. Analyst Lee Simpson said: “This requires real-time processing, support for small language models (SLM) and secure computing across a range of end markets. Having a large number of licensee partners and a large developer base can effectively expand the computing community meaning With Arm in a good position to capture value, Simpson upgraded Arm Holdings to “overweight” from “equal.” He also raised his price target to $190 from $107, which implies 20% upside potential from Thursday’s closing price. Simpson said the growing field of edge AI offers opportunities for the company in smartphones, cars and even AI-powered personal computers. The analyst said Arm is already “well-positioned” to develop custom AI-focused edge chips for the mobile and automotive industries. Simpson sees the rise of automotive chips in particular as a major opportunity, predicting that automotive royalties will soar to $1.1 billion by 2030. He also predicts that Arm will capture 42% of the smartphone royalty services market in fiscal 2027. “We believe that Arm products are the foundation for the successful emergence of edge artificial intelligence,” Simpson said. Arm shares have more than doubled this year. On Friday, they gained another 2%. ARM YTD Mountain ARM Year to Date
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