# AI Chip Race Shifts Focus

> Arm's new AI chips could redefine computing power despite stock drop.
- Title: AI Chip Race Shifts Focus · 24/7 Wall St. | Shortify
- Summary: Arm's new AI chips could redefine computing power despite stock drop. Arm Holdings now sells AI chips for data centers, driving potential $400 stock price…
- Keywords: arm holdings, ai chips, data centers, gpu market share, stock price target, agentic ai, 24/7 Wall St.
- Source: 24/7 Wall St. — https://247wallst.com/investing/2026/11/06/the-ai-chip-race-is-changing-this-could-matter-more-than-gpu-market-share
- Author: Vandita Jadeja
- Published: 2026-11-06T15:33:56+00:00
- Read time: 1 min
- Topics: arm holdings, ai chips, data centers, gpu market share, stock price target, agentic ai
## Arm's New AI Chip Entry
Arm now sells its own AI chip for data centers, shifting from royalty model to direct silicon revenue.

> Arm Gave Back a Third in a Month Despite Beating on Revenue
## Stock Performance Shift
Shares fell 33.8% over the past month but remain up 86.23% year to date.
## Revenue Growth
Q1 2027 revenue of $1.289 billion beat consensus at $1.267 billion with 22.4% year-over-year growth.
## Bull Case for $400
Analysts project $407.95 price target as AI chip demand exceeds $2 billion against $1 billion supply opportunity.
## Margin Risks
Trades at 239x P/E with first-generation ai chip gross margins guided to high 30s, far below 92.48% corporate margin.
## Peer Comparison
NVIDIA trades at 42x earnings while Arm trades at 239x, despite similar ai infrastructure growth.
## Key takeaway

Arm Holdings now sells AI chips for data centers, driving potential $400 stock price despite recent share decline.