ARM to Benefit From Agentic AI-Driven CPU Growth, RBC Says

-- ARM (ARM) is positioned to benefit from agentic artificial intelligence-driven CPU growth and there is room for upside potential as supply constraints ease, RBC Capital Markets said in a Thursday research note.

The company has line of sight to more than $2 billion in AGI CPU revenue across fiscal 2027 and 2028, but it maintained its prior outlook because of wafer and memory supply constraints, according to the brokerage.

In fiscal Q4, data center and cloud AI royalty revenue more than doubled from a year earlier on the ramp of ARM-based server chips across major hyperscalers. The data center segment is on track to become the company's largest business segment, analysts wrote.

For fiscal 2027 and 2028, RBC said it now expects EPS of $2.18 and $3.12, respectively, from prior estimates of $2.01 and $3.03, according to the note.

Growth in AI cluster sizes is also driving demand for networking, where ARM remains the dominant architecture. The company's 20% long-term growth rate for royalties is likely conservative, according to the note.

RBC reiterated its outperform rating on the stock and boosted its price target to $260 per share from $175.

Shares of ARM were down more than 9% in Thursday trading.

Price: $215.08, Change: $-22.23, Percent Change: -9.37%

Sector Update: Energy

Energy stocks were lower Thursday afternoon, with the NYSE Energy Sector Index dropping 2% and the State Street Energy Select Sector SPDR ETF (XLE) falling 1.8%.The Philadelphia Oil Service Sector Index was decreasing 2.2%, and the Dow Jones US Utilities Index was shedding 1.1%.Front-month West Texas Intermediate crude oil was rising 0.6% to $95.61 a barrel, and the global benchmark Brent crude contract was decreasing 0.5% to $100.78 a barrel. Henry Hub natural gas futures rose 2.1% to $2.79 per 1 million BTU.In corporate news, Cheniere Energy (LNG) shares fell 5% after the company reported Thursday a Q1 loss of $16.65 per diluted share, swinging from earnings of $1.57 a year earlier.

$LNG

Williams Continues to Layer on Growth Projects, RBC Capital Markets Says

Williams (WMB) continues to layer on growth projects, including its Neo power innovation project, and estimates a compound annual growth rate of 9% for sanctioned projects through 2030 while still targeting 10%, RBC Capital Markets said in a note Wednesday.The company anticipates a 5x build multiple on the $2.3 billion Neo project cost, implying about $460 million of annual EBITDA generation, while Atlas includes a new 13-year agreement to provide a pipeline capacity of 164 million cubic feet per day to a data center in the Northeast which is expected to be in service by year-end, according to the note.Management expects to be in the top half of its 2026 adjusted EBITDA guidance range of $8.05 billion to $8.35 billion, supported by a strong Q1 and outlook for the rest of the year, the brokerage said.Analysts now forecast 2026 and 2027 adjusted EBITDA of $8.39 billion and $9.29 billion, respectively, and available funds from operations of $6.36 billion and $7.15 billion, respectively.RBC Capital Markets kept an outperform rating on Williams and raised the price target to $83 from $82.Shares of Williams were down 1.8% in Thursday trading.Price: $72.45, Change: $-1.32, Percent Change: -1.78%

$WMB

Vistra Reports Higher Q1 Generation, Advances 4.5 GW Expansion Pipeline

Vistra (VST) reported Q1 earnings Thursday, showing total ongoing operations generation of 50.5 terawatt-hours, up from 48 TWh a year earlier.Generation in the East region increased to 30 TWh for the quarter ended March 31, up from 27.5 TWh a year earlier, while Texas generation rose to 20.1 TWh from 20 TWh.West region generation declined to 0.4 TWh in the quarter from 0.5 TWh a year earlier.Vistra added that total commercial availability fell to 92.7% for Q1, down from 95% a year earlier.Retail electricity volumes declined to 30.1 TWh in the quarter, down from 33.3 TWh a year earlier, amid milder weather conditions in ERCOT.Vistra is advancing about 4.5 gigawatts of generation capacity additions across gas, renewables, coal-to-gas conversions and nuclear uprates, including projects already completed or under construction.The company expects Permian gas peaker units to enter service by Q2 2028 and plans to begin construction on Oak Hill Phase 2 in 2026.Price: $158.55, Change: $+0.25, Percent Change: +0.16%

$VST

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