JP Morgan reiterated its 'neutral' rating on ARM Holdings after the British semiconductor and software design company revealed increased revenues and profits for the fourth quarter. The target price was raised to 625p from 540p.

On Tuesday ARM reported fourth quarter revenues of $262.8m on the basis of international financial reporting standards (IFRS), up from the previous year's $217.0m, and 9.0% higher than the consensus forecast of $241.4m.

"How strong the current semi cycle will be will likely depend on the economic environment," JP Morgan said.

"However, we believe ARM is able to buck the economic environment due to its share gains in semi segments such as embedded markets where it was not exposed before but also the higher royalty it is now charging in the mobile market.

"Valuation remains elevated in our view, but as long as the company does not miss, we believe the stock will go up on upgrades."

RD

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