JPMorgan thinks Arm Holdings ‘ penetration of higher growth segments within the chip market will drive revenue going forward. The firm initiated coverage of the semiconductor stock with an overweight rating and a $70 per share price target. JPMorgan’s forecast implies more than 29% upside from Friday’s $54.08 close. Arm Holdings has risen 6% since going public in September . The company’s initial public offering valued the firm at roughly $54 billion and was one of the most highly anticipated IPOs of the year. ARM YTD mountain Arm Holdings stock. Analyst Harlan Sur highlighted the company’s premier positioning as the leader in providing chips for computer architectures. He also said Arm will likely expand further into the automotive and Internet of Things (IoT) segments. “We see Arm driving an 18%+ revenue CAGR [compounded annual growth rate] (40% EPS CAGR) for the next three years on higher IP content (driving higher royalty rates), market share gains against proprietary/legacy compute architectures, and ARM’s growing market penetration into the highest growth segments of the market like auto, IoT, and datacenter compute,” Sur said. Other firms including Deutsche Bank and Goldman Sachs also initiated coverage of Arm Holdings, both with buy ratings. — CNBC’s Michael Bloom contributed to this report.