Arm, the chip designer, was one of the best performers of last year and is currently continuing its rising trajectory.
Its shares are up 21p at 615.5p, a 3.5% rise which makes it the biggest riser in the FTSE 100. Analysts at UBS reckon the company's fourth quarter revenues could beat consensus forecasts by around 6%, and they have issued a short term buy note on the business with a 620p price target:
[This reflects] imminent catalysts but longer-term remain neutral. Arm is rapidly growing into its multiple but we believe it will need to continue to do this before being more constructive long term.
Analyst Gareth Jenkins highlights a number of possible "catalysts" to come:
While it will be hard to top the news-flow of the prior two years (Microsoft Windows, big.LITTLE, 64 bit), we do see further positives to come including possible Broadcom set top box and Samsung Exynos (using Mali graphics) announcements, launch of 64-bit processors and, longer term, possibly Renesas for microcontrollers and Apple for Mali. In addition the rise of multi-processor chipsets should help support royalty rates.
But he sees some issues ahead, not least increased competition:
We believe Intel has accelerated its roadmap and will unveil its latest Medfield chipset for tablets/smart-phones with possible handset vendor support as early as CES [next week's consumer technology show in Las Vegas]. In addition, while Arm based Microsoft tablets are likely from the second half of 2012, we believe PCs will take longer reflecting the eco-system development required.
