ARM (NASDAQ:ARM) Shares Gap Down – Here’s What Happened

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) gapped down prior to trading on Thursday. The stock had previously closed at $191.80, but opened at $172.05. ARM shares last traded at $170.9430, with a volume of 2,622,359 shares trading hands.

Key Stories Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported record fiscal Q2 revenue of $1.44 billion, up 27% year over year, and EPS of $0.52 versus the $0.48 consensus. Licensing revenue rose 50%, data-center royalties more than doubled, and management’s next-quarter revenue outlook was above analyst estimates. Article: Is Arm Holdings a Buy After Its Latest Earnings Report?
• Positive Sentiment: Management highlighted growing demand for Arm’s AGI CPUs, with more than $2 billion in identified potential revenue across fiscal 2027–28. Arm also said its technology powers over half of hyperscaler servers, while Amazon Graviton revenue commitments have grown substantially. These opportunities support the longer-term AI and data-center growth case, though they depend on deployments and chip production. Article: Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Neutral Sentiment: Oracle plans to offer Arm AGI CPU instances in 2027, a potential route to broader adoption, but the revenue impact will depend on rollout and customer uptake. Article: Oracle Cloud plans to offer Arm AGI CPU instances in 2027
• Negative Sentiment: Investors are concerned that weaker-than-expected smartphone royalty revenue is offsetting AI and data-center growth. A record number of partner chip shipments did not produce a comparable increase in royalties, raising questions about monetization. Commentary also points to Arm’s demanding valuation and the risk that AGI-related revenue takes time to materialize—factors weighing on the shares despite the earnings beat. Article: Arm stock falls as weak smartphone royalties offset AI data-centre growth

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on ARM shares. Rosenblatt Securities lowered their target price on shares of ARM from $270.00 to $250.00 and set a “buy” rating on the stock in a research note on Friday, July 31st. Wells Fargo & Company cut their price target on ARM from $280.00 to $255.00 and set an “overweight” rating for the company in a research note on Thursday. Guggenheim reaffirmed a “buy” rating and issued a $255.00 price target on shares of ARM in a report on Thursday, July 30th. KeyCorp increased their price target on ARM from $300.00 to $430.00 and gave the stock an “overweight” rating in a research report on Tuesday, July 14th. Finally, Royal Bank Of Canada dropped their price objective on ARM from $340.00 to $300.00 and set an “outperform” rating on the stock in a report on Thursday. Nineteen research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $293.72.

ARM Price Performance

The firm has a market capitalization of $180.57 billion, a PE ratio of 173.95, a P/E/G ratio of 5.91 and a beta of 3.93. The company’s fifty day simple moving average is $256.08 and its 200-day simple moving average is $229.28.

ARM (NASDAQ:ARM) last released its earnings results on Wednesday, November 4th. The company reported $0.52 EPS for the quarter, topping analysts’ consensus estimates 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 during the quarter, compared to analysts’ expectations of $1.38 billion. During the same quarter in the previous year, the company earned $0.39 earnings per share. The company’s quarterly revenue was up 27.1% on a year-over-year basis. Analysts forecast that Arm Holdings PLC Sponsored ADR will post 1.17 earnings per share for the current year.

Insider Buying and Selling at ARM

In related news, CFO Jason Child sold 10,400 shares of the company’s stock in a transaction dated Monday, September 21st. The shares were sold at an average price of $300.00, for a total value of $3,120,000.00. Following the completion of the sale, the chief financial officer owned 153,442 shares of the company’s stock, valued at approximately $46,032,600. This represents a 6.35% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Trading of ARM

Several institutional investors have recently added to or reduced their stakes in the stock. Kings Path Partners LLC purchased a new stake in ARM during the third quarter worth about $29,000. Evelyn Partners Investment Management Services Ltd purchased a new stake in ARM during the 1st quarter worth approximately $30,000. Cassaday & Co Wealth Management LLC purchased a new stake in ARM during the 1st quarter worth approximately $40,000. Sterling Capital Management LLC increased its stake in ARM by 1,400.0% during the 1st quarter. Sterling Capital Management LLC now owns 375 shares of the company’s stock worth $57,000 after buying an additional 350 shares during the period. Finally, CX Institutional acquired a new stake in ARM during the 3rd quarter worth approximately $58,000. Institutional investors and hedge funds own 7.53% of the company’s stock.

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.