Key Stats for Arm Holdings Stock
- Today’s Price Change: -10%
- Current Share Price: $111
- 52-Week High: $188
- Analysts’ Price Target: $147
What Happened?
Arm Holdings (ARM) stock plunged nearly 10% after the chip design company issued fiscal first-quarter guidance (for the quarter ending in June) that fell short of Wall Street expectations. The company also declined to provide full-year guidance, citing global trade and economic uncertainty.
This marks a significant reversal for a stock performing strongly in 2025 despite broader market volatility.
For the fiscal fourth quarter, Arm reported adjusted earnings per share of $0.55, above estimates of $0.52. It reported revenue of $1.24 billion (slightly above the $1.23 billion consensus).
Arm’s royalty revenue rose 30% from a year earlier to $607 million, reflecting strong adoption of its latest technology in higher-end smartphone chips.
However, investors focused on Arm’s cautious outlook. The chip maker forecast first-quarter revenue (for the quarter ending in June) between $1 billion and $1.1 billion, with the midpoint below the $1.1 billion analyst consensus.
Arm also projected adjusted earnings per share between $0.30 and $0.38 for the upcoming quarter, significantly below the 42 cents that analysts expected.
The company’s decision not to issue full-year guidance was most concerning to investors. CFO Jason Child cited “lower visibility than is traditional to start the year” due to global trade and economic uncertainty.
See ARM’s full Q1 earnings transcript (It’s free) >>>
What the Market Is Telling Us
The sharp decline in Arm Holdings stock price reflects investor concerns about the semiconductor industry’s exposure to geopolitical risks and economic headwinds.
President Donald Trump’s recent announcement of sweeping global tariffs and tighter U.S. restrictions on exporting advanced semiconductors to China has created uncertainty across the sector, with Arm joining companies like Samsung and Qualcomm in providing cautious forecasts.
CEO Rene Haas attributed the below-expectations guidance primarily to a large licensing deal that may not close during the fiscal first quarter, rather than fundamental business weakness.
He noted that royalty revenue growth is expected to be between 25% and 30% in the fiscal first quarter, higher than in the previous quarter. Haas also stated that tariffs have had little direct impact on Arm’s business, as only “10% to 15% of our shipments end up in the U.S.”
However, the market appears concerned about broader implications for consumer demand in the smartphone market where Arm’s technology is ubiquitous.
The market reaction also reflects the premium valuation for Arm Holdings stock, with its market cap exceeding $130 billion before this earnings report. It’s high valuation left little room for disappointment, particularly regarding future growth projections.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
