ARM (NASDAQ:ARM) Stock Price Down 5.3% – What’s Next?

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) was down 5.3% during trading on Wednesday. The company traded as low as $189.88 and last traded at $191.80. Approximately 8,285,914 shares traded hands during trading, an increase of 11% from the average session volume of 7,443,106 shares. The stock had previously closed at $202.49.

Key Stories Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported fiscal Q2 revenue of $1.44 billion, ahead of estimates. Licensing revenue rose 50%, and data-center royalties doubled, highlighting demand for Arm technology in AI infrastructure. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: Arm’s push into its own AGI CPU could broaden its opportunity beyond chip-design royalties; management sees potential for up to $2 billion in revenue in fiscal 2027–28. Oracle has also said it plans to offer Arm AGI CPU instances in 2027. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: UBS and JPMorgan retained Buy/Overweight ratings despite cutting their price targets, indicating continued analyst confidence in potential upside. UBS analyst recommendations JPMorgan price target
• Neutral Sentiment: AI and data-center stocks faced market-wide pressure after midterm-election results raised concerns about a possible slowdown in data-center investment. Major indexes recovered some losses Friday, offering a more supportive backdrop, though uncertainty remains. Tech executives react to post-midterm AI sell-off
• Negative Sentiment: Investors focused on weaker smartphone-related royalties and concerns that handset demand may soften, offsetting Arm’s strong data-center growth. Royalty revenue is recurring, so slower growth here may temper expectations for future earnings. Weak smartphone royalties offset AI data-center growth
• Negative Sentiment: Valuation concerns amplified the post-earnings selloff: investors questioned whether Arm’s high expectations are justified even after the quarterly revenue beat. UBS cut its target from $320 to $270, and JPMorgan lowered its target from $255 to $245. Arm stock slides as results stoke valuation doubts

Analysts Set New Price Targets

A number of equities research analysts recently commented on ARM shares. New Street Research upgraded shares of ARM from a “neutral” rating to a “buy” rating and set a $260.00 price objective on the stock in a report on Thursday, July 30th. Guggenheim reiterated a “buy” rating and set a $255.00 target price on shares of ARM in a report on Thursday, July 30th. Needham & Company LLC reissued a “buy” rating and issued a $255.00 price target on shares of ARM in a research note on Thursday. HSBC reaffirmed a “hold” rating and set a $215.00 price objective on shares of ARM in a research report on Thursday. Finally, Barclays decreased their price objective on ARM from $360.00 to $325.00 and set an “overweight” rating for the company 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 issued a Sell rating to the company. Based on data from MarketBeat.com, ARM has a consensus rating of “Moderate Buy” and a consensus target price of $291.72.

ARM Stock Performance

The company has a market cap of $186.51 billion, a P/E ratio of 200.71, a PEG ratio of 5.60 and a beta of 3.93. The company has a fifty day moving average price of $252.78 and a two-hundred day moving average price of $229.93.

ARM (NASDAQ:ARM) last posted its quarterly earnings results on Wednesday, November 4th. The company reported $0.52 earnings per share for the quarter, beating analysts’ consensus estimates of $0.48 by $0.04. The firm had revenue of $1.44 billion during the quarter, compared to the consensus estimate of $1.38 billion. ARM had a return on equity of 11.86% and a net margin of 17.13%. The business’s revenue was up 27.1% compared to the same quarter last year. During the same period last year, the company earned $0.39 earnings per share. Research analysts anticipate that Arm Holdings PLC Sponsored ADR will post 1.17 EPS for the current year.

Insiders Place Their Bets

In other ARM news, CFO Jason Child sold 10,400 shares of the company’s stock in a transaction 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 sale, the chief financial officer directly 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 transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the company. Kings Path Partners LLC bought a new position in ARM during the 3rd quarter worth $29,000. Evelyn Partners Investment Management Services Ltd acquired a new position in ARM in the 1st quarter valued at $30,000. First Command Advisory Services Inc. raised its holdings in ARM by 158.8% in the 3rd quarter. First Command Advisory Services Inc. now owns 132 shares of the company’s stock valued at $38,000 after acquiring an additional 81 shares in the last quarter. Cassaday & Co Wealth Management LLC bought a new stake in shares of ARM during the 1st quarter valued at $40,000. Finally, Sterling Capital Management LLC lifted its position in shares of ARM by 1,400.0% during the 1st quarter. Sterling Capital Management LLC now owns 375 shares of the company’s stock valued at $57,000 after acquiring an additional 350 shares during the period. 7.53% of the stock is currently owned by institutional investors and hedge funds.

ARM Company Profile

Arm Holdings plc designs and licenses semiconductor technology, including processor architectures and related intellectual property. Rather than manufacturing chips, the company licenses its designs and collects royalties on products that use them.

Arm’s offerings include Cortex CPUs, Mali graphics processors, Neoverse infrastructure platforms and other technology for applications ranging from smartphones and consumer electronics to automotive systems, the Internet of Things and cloud computing.