ARM (NASDAQ:ARM) Stock Price Down 13.1% on Analyst Downgrade

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM)’s share price dropped 13.1% during mid-day trading on Thursday after JPMorgan Chase & Co. lowered their price target on the stock from $255.00 to $245.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. ARM traded as low as $163.13 and last traded at $166.72. 15,272,072 shares were traded during trading, an increase of 104% from the average daily volume of 7,474,902 shares. The stock had previously closed at $191.80.

A number of other brokerages have also recently issued reports on ARM. Raymond James Financial restated an “outperform” rating and issued a $166.00 price objective on shares of ARM in a research note on Tuesday, August 25th. Rosenblatt Securities decreased their target price on shares of ARM from $270.00 to $250.00 and set a “buy” rating on the stock in a research report on Friday, July 31st. Weiss Ratings reissued a “hold (c)” rating on shares of ARM in a research note on Thursday, October 15th. The Goldman Sachs Group reissued a “sell” rating and issued a $160.00 target price on shares of ARM in a research note on Thursday. Finally, Bank of America reissued a “neutral” rating and issued a $335.00 price target (up from $245.00) on shares of ARM in a research report on Thursday, July 30th. Nineteen analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $293.72.

Insider Activity

In other ARM news, CFO Jason Child sold 10,400 shares of the stock in a transaction on Monday, September 21st. The stock was sold at an average price of $300.00, for a total value of $3,120,000.00. Following the transaction, the chief financial officer directly owned 153,442 shares in the company, valued at approximately $46,032,600. This trade represents a 6.35% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

More ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: AI and data-center demand remain strong: data-center royalties more than doubled, licensing revenue rose about 50%, and Arm reported record chip shipments. Management also expressed confidence in its AGI CPU opportunity, with identified demand that could support up to $2 billion in revenue across fiscal 2027–28. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: Arm’s revenue and earnings beat analysts’ estimates, and its outlook for the next quarter was reported above expectations, reflecting continued AI-related demand. Arm forecasts third-quarter revenue above estimates
• Neutral Sentiment: Longer-term AI prospects include Oracle’s plan to offer Arm AGI CPU instances in 2027 and Arm’s claim that its chips power more than half of hyperscaler servers; the financial impact will depend on adoption and production volumes. Oracle Cloud plans to offer Arm AGI CPU instances in 2027
• Negative Sentiment: Investors were concerned that smartphone royalties were weaker than expected, with rising memory costs potentially pressuring handset demand. Overall recurring royalty growth also lagged licensing growth, highlighting that chip shipments do not necessarily convert quickly into higher royalty revenue. Weak smartphone royalties offset AI data-center growth
• Negative Sentiment: With expectations and valuation still elevated, the earnings beat may not have been enough to satisfy investors seeking faster, broader royalty growth. Chip-sector concerns—including possible packaging-substrate constraints—added to pressure on the shares. Arm Stock Has an Apple and Android Problem

Institutional Trading of ARM

Institutional investors and hedge funds have recently made changes to their positions in the business. Silver Grove Financial Group Inc. raised its stake in shares of ARM by 47.2% in the 3rd quarter. Silver Grove Financial Group Inc. now owns 209 shares of the company’s stock valued at $61,000 after purchasing an additional 67 shares during the period. Northbridge Financial Group LLC bought a new stake in shares of ARM in the third quarter valued at about $210,000. Lido Advisors LLC boosted its position in shares of ARM by 17.1% during the third quarter. Lido Advisors LLC now owns 19,621 shares of the company’s stock worth $5,683,000 after buying an additional 2,867 shares during the period. Cornerstone Wealth Management LLC boosted its position in shares of ARM by 2.3% during the third quarter. Cornerstone Wealth Management LLC now owns 4,183 shares of the company’s stock worth $1,212,000 after buying an additional 95 shares during the period. Finally, New York Life Investment Management LLC acquired a new position in shares of ARM during the third quarter worth about $295,000. Institutional investors own 7.53% of the company’s stock.

ARM Stock Down 13.1%

The firm has a market capitalization of $178.07 billion, a P/E ratio of 171.88, a P/E/G ratio of 5.91 and a beta of 3.93. The stock has a fifty day moving average of $256.08 and a 200-day moving average of $229.28.

ARM (NASDAQ:ARM) last released its earnings results on Wednesday, November 4th. The company reported $0.52 EPS for the quarter, beating the consensus estimate of $0.48 by $0.04. ARM had a return on equity of 12.24% and a net margin of 20.25%. The firm had revenue of $1.44 billion for the quarter, compared to analysts’ expectations of $1.38 billion. During the same quarter in the previous year, the business posted $0.39 EPS. The business’s quarterly revenue was up 27.1% compared to the same quarter last year. Sell-side analysts predict that Arm Holdings PLC Sponsored ADR will post 1.17 EPS for the current fiscal year.

About ARM

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops central processing unit (CPU) architectures and related intellectual property. Rather than manufacturing chips itself, Arm licenses its designs and instruction-set architectures to semiconductor companies and technology manufacturers, which incorporate them into their own products.

The company’s offerings include CPU processor cores, graphics processing units through its Mali product family, system IP, development tools and software.