ARM (NASDAQ:ARM) Stock Price Down 4.5% – Here’s Why

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM)’s share price dropped 4.5% during mid-day trading on Monday. The stock traded as low as $196.12 and last traded at $196.79. Approximately 6,216,341 shares changed hands during trading, a decline of 17% from the average daily volume of 7,458,735 shares. The stock had previously closed at $205.97.

Key Stories Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Fiscal Q2 revenue rose 27% year over year to $1.44 billion, beating analyst estimates; the commonly cited EPS figure of $0.52 also topped the $0.48 consensus. Data-center royalties more than doubled, reflecting demand for Arm technology in AI infrastructure. Arm Shares Slip Despite Q2 Double-Beat: Details
• Positive Sentiment: Arm forecast third-quarter revenue above analyst expectations, citing the AI-spending boom. The company also said Amazon’s Graviton-related revenue commitments increased more than 20-fold year over year, and that its chips power over half of hyperscaler servers—signals of expanding adoption. Arm forecasts third-quarter revenue above estimates on AI spending boom Amazon Graviton commitments
• Neutral Sentiment: AI and data-center demand are strengthening Arm’s growth outlook, but valuation remains a concern after a major multi-year share-price run. That leaves the stock vulnerable if investors conclude growth is not sufficient to justify expectations. Arm stock valuation after its run
• Negative Sentiment: Despite the quarterly beat and upbeat forecast, shares declined following the report. One article highlighted a nearly 75% profit miss, suggesting that profitability measures may have disappointed even as the headline EPS and revenue figures beat estimates; this mixed picture may have prompted investors to sell into the results. Arm Q2 2027 earnings: revenue beats, but profit misses Arm beats quarterly targets, but stock falls

Wall Street Analyst Weigh In

A number of equities research analysts have recently commented on ARM shares. Piper Sandler initiated coverage on shares of ARM in a report on Wednesday, September 9th. They set an “overweight” rating and a $320.00 price target for the company. Raymond James Financial reissued an “outperform” rating and set a $166.00 price objective on shares of ARM in a research note on Tuesday, August 25th. Bank of America restated a “neutral” rating and set a $335.00 target price (up from $245.00) on shares of ARM in a research report on Thursday, July 30th. HSBC lowered shares of ARM from a “buy” rating to a “hold” rating and raised their target price for the stock from $255.00 to $315.00 in a research report on Tuesday, July 14th. Finally, Jefferies Financial Group reaffirmed a “buy” rating and issued a $320.00 target price on shares of ARM in a research note on Monday, July 20th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $303.32.

ARM Stock Performance

The firm has a fifty day simple moving average of $256.08 and a 200 day simple moving average of $229.28. The company has a market cap of $204.86 billion, a PE ratio of 220.10, a PEG ratio of 5.91 and a beta of 3.93.

ARM (NASDAQ:ARM) last announced its quarterly earnings data on Wednesday, November 4th. The company reported $0.52 earnings per share for the quarter, topping the consensus estimate of $0.48 by $0.04. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business had revenue of $1.44 billion for the quarter, compared to analyst estimates of $1.38 billion. During the same period in the prior year, the firm posted $0.39 EPS. The company’s revenue was up 27.1% on a year-over-year basis. As a group, equities analysts predict that Arm Holdings PLC Sponsored ADR will post 1.17 EPS for the current fiscal year.

Insider Buying and Selling

In other ARM news, CFO Jason Child sold 10,400 shares of the stock in a transaction that occurred on Monday, September 21st. The shares were sold at an average price of $300.00, for a total transaction of $3,120,000.00. Following the transaction, the chief financial officer owned 153,442 shares of the company’s stock, valued at $46,032,600. This trade represents a 6.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

Several institutional investors have recently made changes to their positions in ARM. Kings Path Partners LLC acquired a new stake in ARM during the third quarter worth about $29,000. Evelyn Partners Investment Management Services Ltd purchased a new position in shares of ARM in the 1st quarter worth about $30,000. Cassaday & Co Wealth Management LLC purchased a new position in shares of ARM in the 1st quarter worth about $40,000. Sterling Capital Management LLC raised its holdings in shares of ARM by 1,400.0% in the 1st quarter. Sterling Capital Management LLC now owns 375 shares of the company’s stock worth $57,000 after purchasing an additional 350 shares during the period. Finally, CX Institutional acquired a new position in shares of ARM in the 3rd quarter valued at about $58,000. 7.53% of the stock is owned by hedge funds and other institutional investors.

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.