ARM (NASDAQ:ARM) Releases Earnings Results, Beats Estimates By $0.02 EPS

Key Points

• ARM reported Q4 EPS of $0.60, beating estimates by $0.02 on revenue of $1.49B, and guided Q1 FY27 EPS to $0.36–$0.44.
• Demand for its new Arm AGI/data‑center CPU has accelerated to over $2B for FY2027–28 with a long‑term target of $15B by FY2031, but management warned supply constraints could limit the initial revenue ramp.
• Shares rose about 13.6% to $237.30 after the results, though the stock trades at a very high P/E (~316) and several insiders sold shares under pre‑arranged 10b5‑1 plans.

ARM (NASDAQ:ARM - Get Free Report) announced its earnings results on Wednesday. The company reported $0.60 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.58 by $0.02, FiscalAI reports. The company had revenue of $1.49 billion for the quarter, compared to analysts' expectations of $1.47 billion. ARM had a return on equity of 14.01% and a net margin of 17.15%. ARM updated its Q1 2027 guidance to 0.360-0.440 EPS.

Here are the key takeaways from ARM's conference call:

• Arm reported a record quarter and fiscal year with $1.49 billion in Q4 revenue and $4.92 billion for FY2026, marking a third consecutive year of >20% revenue growth and record non‑GAAP EPS.
• Demand for the Arm AGI CPU has accelerated to over $2 billion of customer demand for FY2027–2028 and the company remains on track for a long‑term target of $15 billion by FY2031, with support from 50+ ecosystem partners and major customers.
• Arm is keeping near‑term AGI CPU revenue guidance conservative (maintaining the prior $1 billion outlook) while it secures wafers, memory and packaging capacity, indicating supply constraints could limit initial chip revenue ramp.
• Data‑center momentum continues: royalty revenue from cloud AI and data‑center chips has more than doubled year‑over‑year, driven by hyperscaler adoption (AWS, Google, Microsoft, NVIDIA) and strong share in networking DPUs/SmartNICs.
• Arm is increasing R&D (non‑GAAP OpEx up ~30% YoY) but delivered a ~49% non‑GAAP operating margin

ARM Trading Up 13.6%

Shares of ARM traded up $28.46 on Wednesday, reaching $237.30. 24,520,765 shares of the company's stock traded hands, compared to its average volume of 7,497,443. The stock has a market cap of $250.71 billion, a PE ratio of 316.40, a PEG ratio of 9.16 and a beta of 3.40. The stock's 50 day simple moving average is $150.26 and its two-hundred day simple moving average is $137.61. ARM has a 52-week low of $100.02 and a 52-week high of $239.50.

Insider Buying and Selling

In related news, CEO Rene A. Haas sold 9,299 shares of the stock in a transaction that occurred on Tuesday, April 14th. The stock was sold at an average price of $160.85, for a total transaction of $1,495,744.15. Following the completion of the sale, the chief executive officer directly owned 273,680 shares of the company's stock, valued at approximately $44,021,428. This trade represents a 3.29% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Jason Child sold 21,280 shares of the stock in a transaction that occurred on Wednesday, April 22nd. The shares were sold at an average price of $180.00, for a total value of $3,830,400.00. Following the sale, the chief financial officer directly owned 153,426 shares of the company's stock, valued at $27,616,680. The trade was a 12.18% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 83,712 shares of company stock valued at $13,614,730 over the last ninety days.

Institutional Trading of ARM

A number of large investors have recently bought and sold shares of the company. Morgan Stanley increased its position in ARM by 1.2% in the fourth quarter. Morgan Stanley now owns 3,783,006 shares of the company's stock worth $413,521,000 after buying an additional 45,314 shares during the last quarter. Invesco Ltd. increased its position in ARM by 36.9% in the fourth quarter. Invesco Ltd. now owns 2,426,850 shares of the company's stock worth $265,279,000 after buying an additional 654,727 shares during the last quarter. Coatue Management LLC increased its position in ARM by 1.8% in the fourth quarter. Coatue Management LLC now owns 2,300,000 shares of the company's stock worth $251,413,000 after buying an additional 40,174 shares during the last quarter. Wellington Management Group LLP increased its position in ARM by 41.6% in the fourth quarter. Wellington Management Group LLP now owns 2,149,159 shares of the company's stock worth $234,925,000 after buying an additional 631,576 shares during the last quarter. Finally, Schroder Investment Management Group increased its position in ARM by 11.0% in the fourth quarter. Schroder Investment Management Group now owns 1,891,310 shares of the company's stock worth $206,739,000 after buying an additional 187,035 shares during the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Beat on results — ARM posted $0.60 EPS on $1.49B revenue, topping Street estimates and showing solid margins. Read More.
• Positive Sentiment: Upbeat guidance — ARM guided Q1 FY27 revenue around $1.26B and EPS to $0.36–$0.44 (midpoint ~$0.40), above consensus, reducing near‑term execution risk. Read More.
• Positive Sentiment: Large demand for new CPU — management said there is more than $2B of customer demand for its new Arm AGI/data‑center CPU across fiscal 2027–28, validating the company’s move into full‑chip economics. Read More.
• Positive Sentiment: AI/industry tailwinds — upside was amplified by a broader chip rally after strong AMD guidance and investor optimism around AI infrastructure spending. Read More.
• Neutral Sentiment: Official filing and shareholder letter published (full results and outlook available). Read More.
• Neutral Sentiment: Unusually large call buying was recorded into the print, indicating speculative/leveraged bullish positioning that can amplify moves in either direction. (Options flow reported in market commentary.)
• Negative Sentiment: Strategic risk — ARM’s shift into designing its own data‑center CPUs could pit it against some licensees/customers, creating potential channel or competitive friction. Read More.
• Negative Sentiment: Valuation and technical caution — the stock trades at a very high P/E and some analysts/technical commentators warned of downside if execution or AI spending momentum slows. Read More.

Wall Street Analysts Forecast Growth

ARM has been the topic of several analyst reports. Citigroup cut ARM from a "buy" rating to a "hold" rating in a research report on Tuesday, January 13th. Benchmark reaffirmed a "hold" rating on shares of ARM in a research report on Thursday, February 5th. Morgan Stanley reaffirmed an "equal weight" rating and set a $150.00 target price (up from $135.00) on shares of ARM in a research report on Tuesday, April 7th. Susquehanna lifted their target price on ARM from $170.00 to $210.00 and gave the company a "positive" rating in a research report on Thursday, April 16th. Finally, Evercore cut their target price on ARM from $215.00 to $170.00 and set an "outperform" rating on the stock in a research report on Thursday, February 5th. Eighteen equities research analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $177.75.

About ARM

Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.

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