ARM (NASDAQ:ARM) Trading Down 8.5% - Here's What Happened

Key Points

• ARM shares fell 8.5% on Friday, trading as low as $208.50 after closing at $228.50 the prior day, with volume running above average. The decline came amid broader weakness in chip stocks and a softer AI trade.
• Despite the drop, recent news remains generally constructive: analysts highlighted ARM’s ecosystem strength, its push into AI semiconductors, and UBS data showing gains in server chip share at Intel’s expense. These developments support the long-term bullish case for the stock.
• Wall Street still largely likes ARM, with 19 Buy ratings, six Holds, and one Sell, plus an average target price of $199.61. Recent insider sales and a very high valuation may be adding near-term pressure, but analysts continue to forecast growth.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price fell 8.5% on Friday . The stock traded as low as $208.50 and last traded at $209.16. 10,038,175 shares were traded during mid-day trading, an increase of 28% from the average session volume of 7,814,196 shares. The stock had previously closed at $228.50.

ARM News Roundup

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm’s software and hardware ecosystem continues to reinforce its competitive moat, supporting its leadership in smartphones and device computing. ARM's Powerful Ecosystem Advantage Drives Market Leadership
• Positive Sentiment: Recent reporting says Arm and SoftBank tried to buy Cerebras, signaling continued ambition to expand Arm’s footprint in AI semiconductors. Arm’s Cerebras Bid Sheds Light On AI Chip Expansion Plans
• Positive Sentiment: UBS data showed ARM gaining server chip share at Intel’s expense, reinforcing the bull case for Arm’s long-term growth in data center and AI-related markets. New report shows AMD and ARM continue server share gains at Intel’s expense
• Neutral Sentiment: Analysts warned that the AI trade may be taking a breather, which has weighed on chip stocks broadly rather than on ARM-specific fundamentals. The AI Trade Takes a Breather to End the Week
• Neutral Sentiment: A major insider sale by Spencer Collins may be adding near-term pressure, though it does not change the company’s operating outlook by itself. ARM Insider Spencer Collins Sells 51,961 Shares
• Negative Sentiment: Another market note linked ARM to warnings about a potential chip-stock bubble, contributing to the day’s risk-off sentiment in semiconductor names. Intel Stock Is Falling as Analyst Issues Chip-Stock Bubble Warning

Wall Street Analysts Forecast Growth

ARM has been the topic of a number of research reports. Deutsche Bank Aktiengesellschaft reissued a "hold" rating on shares of ARM in a report on Thursday, May 7th. Raymond James Financial reissued an "outperform" rating on shares of ARM in a report on Thursday, May 7th. Mizuho raised their price objective on shares of ARM from $230.00 to $255.00 and gave the stock an "outperform" rating in a report on Wednesday, May 6th. Benchmark reissued a "hold" rating on shares of ARM in a report on Thursday, February 5th. Finally, Needham & Company LLC raised their price objective on shares of ARM from $200.00 to $255.00 and gave the stock a "buy" rating in a report on Thursday, May 7th. Nineteen research analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $199.61.

ARM Trading Down 8.5%

The company has a market cap of $220.98 billion, a P/E ratio of 249.00, a PEG ratio of 7.63 and a beta of 3.40. The business's 50 day simple moving average is $163.22 and its 200 day simple moving average is $140.10.

ARM (NASDAQ:ARM - Get Free Report) last released its earnings results on Wednesday, April 1st. The company reported $0.60 EPS for the quarter. ARM had a net margin of 18.37% and a return on equity of 12.43%. The company had revenue of $1.49 billion for the quarter. Sell-side analysts anticipate that ARM Holdings PLC Sponsored ADR will post 1.18 EPS for the current year.

Insiders Place Their Bets

In other news, CEO Rene A. Haas sold 9,299 shares of ARM stock in a transaction that occurred on Tuesday, April 14th. The shares were sold at an average price of $160.85, for a total transaction of $1,495,744.15. Following the sale, the chief executive officer owned 273,680 shares in the company, valued at $44,021,428. This trade represents a 3.29% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Spencer Collins sold 51,961 shares of ARM stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $211.73, for a total transaction of $11,001,702.53. Following the sale, the insider owned 51,125 shares in the company, valued at approximately $10,824,696.25. The trade was a 50.41% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 135,673 shares of company stock worth $24,616,433.

Institutional Investors Weigh In On ARM

Several institutional investors and hedge funds have recently modified their holdings of ARM. Capital Research Global Investors bought a new stake in shares of ARM during the third quarter valued at approximately $243,098,000. Northwestern Mutual Wealth Management Co. raised its position in shares of ARM by 2,623.5% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,671,787 shares of the company's stock valued at $182,743,000 after buying an additional 1,610,403 shares during the last quarter. Hyperion Asset Management Ltd bought a new stake in shares of ARM during the third quarter valued at approximately $202,980,000. Employees Provident Fund Board bought a new stake in shares of ARM during the fourth quarter valued at approximately $120,241,000. Finally, Arrowstreet Capital Limited Partnership raised its position in shares of ARM by 1,203.5% during the first quarter. Arrowstreet Capital Limited Partnership now owns 945,152 shares of the company's stock valued at $142,983,000 after buying an additional 872,644 shares during the last quarter. Institutional investors own 7.53% of the company's stock.

ARM Company Profile

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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