Arm Falls 7% After Morgan Stanley Downgrade

Morgan Stanley cut Arm Holdings ADR rating from Overweight to Equal‑weight, triggering a >7% share price decline on 7 April 2026.
Despite the downgrade, Morgan Stanley raised the price target to $150, up from $135, citing long‑term AI royalty potential.
Analysts highlighted Arm’s cloud‑data‑center expansion and architecture suitability for “agentic AI,” but warned of execution, competitive and cyclical risks.
The downgrade reflects a broader Wall Street shift toward caution on AI‑related semiconductor stocks amid concerns of a potential bubble.