Despite a wave of price target reductions from UBS, shares of Arm Holdings (NASDAQ: ARM), Qualcomm (NASDAQ: QCOM), and KLA Corp. (NASDAQ: KLAC) moved higher in Monday morning trade.
ARM shares led the gainers, climbing approximately 2.4% even after UBS delivered its steepest cut among the three semiconductor names it revised.
KLAC added roughly 1% on the session, while QCOM traded little changed near $171 following its own target reduction from the Swiss investment bank.
UBS lowered its price target on Qualcomm to $190 from $235, maintaining a “Neutral” rating on the stock, according to a note to investors cited by TheFly.
The firm also trimmed its target on KLA Corp. to $240 from $255, likewise retaining a “Neutral” stance on the chipmaker’s shares.
ARM received the most aggressive cut, with UBS slashing its target to $360 from $470, though the firm held firm on its “Buy” rating, the only bullish call of the three.
Despite the reductions, each revised target still implies meaningful upside from current trading levels, suggesting UBS views the pullback as an opportunity rather than a structural deterioration.
UBS’s new $190 target for QCOM implies roughly 11% upside, a figure that trails the stock’s average analyst consensus target of $222, which points to nearly 30% upside according to Koyfin data.
For KLAC, UBS’s $240 target implies around 12% upside, broadly in line with the consensus target of $234, which itself suggests approximately 10% upside from current levels.
UBS’s $360 target for ARM implies potential upside of about 32%, comfortably exceeding the stock’s consensus target of $304, giving ARM the most favorable risk-reward profile among the trio by this measure.
The target cuts arrive after a challenging stretch for semiconductor stocks, with the sector facing pressure over concerns around AI infrastructure spending despite continued robust demand for advanced chips.
Year-to-date performance tells sharply different stories across the three names, with ARM surging roughly 147%, KLAC gaining more than 76%, and Qualcomm essentially flat with a return of just 1.55%.
Valuation gaps are equally stark, with ARM carrying a forward PEG ratio of 3.59 and KLAC at 2.15, while Qualcomm’s price-to-earnings-to-growth ratio over the next 12 months stands at 5.99, the richest of the three despite its weak year-to-date performance.
Retail sentiment on Stocktwits skewed cautious across the board, with Qualcomm sitting in “bearish” territory alongside “low” chatter levels, and KLAC also trending “bearish” with “normal” levels of activity.
Sentiment around ARM was comparatively more measured, sitting in “neutral” territory with “normal” chatter levels, suggesting retail investors have not fully committed to the bullish case even after the stock’s strong run.
