UPDATE: Jefferies Upgrades ARM Holdings to Buy on Mid- and Long-Term Outlook

Jefferies upgraded ARM Holdings ARMH from Hold to Buy. Jefferies analyst Lee Simpson noted, "We see development in four market areas (mobile computing, datacentres, networking, Internet of Things) as key to the emergence of ARM as the architecture of choice for the mid-to-long term. ARM remains well-positioned for the mid-to-long term given: (i) rising royalty rates (cortex-A driven; later ARMv8), (ii) record licensing (j/est backlog of $570m+), (iii) upcoming tax benefits (dropping to c.17% effective tax rate long term), and (iv) Opex control showing through. Overall, we expect earnings growth (3-year CAGR of 40%) to continue largely unperturbed through 2013-16e." ARM Holdings closed at $41.76 on Thursday.