Arm Holdings (ARM 4.11%) stock is surging in Monday's trading session, up 10.1% as of 1:15 p.m. ET, according to data from S&P Global Market Intelligence.
Before the market opened, it was announced that the semiconductor tech company had joined a new partnership to advance artificial intelligence and other technologies in the telecommunications industry. The stock is also getting a boost from bullish analyst coverage. The company's share price is now up 132% from the close of trading on the day of its initial public offering (IPO) last September.
Arm just joined a powerful new alliance
This year's Mobile World Congress started Monday and will run through Thursday, and it has already delivered some promising news for Arm investors. The semiconductor design company has entered into a new partnership with Nvidia, Microsoft, Amazon, Softbank, Samsung, Nokia, and Ericsson to bolster radio-area-network (RAN) and AI technologies in the telecommunication industry.
The new partnership, which has been dubbed the AI-RAN Alliance, aims to improve efficiency across the telecom industry and pave the way for new innovations.
"The AI-RAN Alliance brings together industry-shaping companies with expertise from silicon through software to deliver on the promise of ubiquitous AI and 6G," said Nvidia Senior Telecom Vice President Ronnie Vasishta.
It will likely be years before the fruits of this new partnership make their way to the market, but Arm's inclusion in it is undoubtedly a bullish sign for the company.
Analysts see additional upside potential
Rosenblatt Securities analyst Hans Mosesmann published a bullish note on Arm stock Monday, raising his one-year price target on the stock from $140 per share to $180 per share. Mosesmann sees royalty fee trends as a positive catalyst for Arm and expects that AI-related licensing will help drive a significant increase in the percentage rates that the company is able to command.
In addition to favorable business developments, the analyst also thinks that Arm's business warrants higher valuation multiples than it now carries. Rosenblatt's new target is roughly 23% above the current share price.
