ARM (NASDAQ:ARM) Stock Price Up 4.7% - Here's Why

Key Points

• ARM shares rose 4.7% in Friday mid-day trading, reaching $174.62 after closing at $166.72 the prior session.
• Quarterly results beat estimates: revenue climbed 27% year over year to $1.44 billion and adjusted EPS was $0.52. Data-center royalties more than doubled, with management citing AI demand and potential AGI CPU revenue.
• Analysts remain broadly positive but have trimmed price targets, while concerns persist over smartphone royalties and ARM’s high valuation. The stock carries a “Moderate Buy” consensus rating and an average target of $291.72.

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report) rose 4.7% during mid-day trading on Friday. The stock traded as high as $177.62 and last traded at $174.62. Approximately 6,453,377 shares changed hands during mid-day trading, a decline of 14% from the average session volume of 7,475,054 shares. The stock had previously closed at $166.72.

ARM News Summary

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm’s fiscal Q2 results beat estimates: revenue rose 27% year over year to $1.44 billion and adjusted EPS was $0.52 versus a $0.48 consensus. Data-center royalties more than doubled, while management highlighted AI demand and the potential for its AGI CPU to generate up to $2 billion in revenue in fiscal 2027–28. Arm Holdings' Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: Analysts retained positive ratings despite lowering targets: UBS cut its target to $270 but kept a Buy rating, and JPMorgan lowered its target to $245 while maintaining Overweight. UBS price-target update
• Neutral Sentiment: AI-related market turbulence weighed on chip and data-center stocks after midterm-election results raised fears of slower data-center investment. Major indexes recovered part of Thursday’s decline on Friday, providing a broader-market tailwind. Tech executives react to post-midterm AI sell-off
• Negative Sentiment: The earnings beat did not ease concerns over slower smartphone-related royalties and the gap between chip shipments and royalty revenue. Investors are also questioning ARM’s high valuation, leaving less room for disappointment; UBS’s and JPMorgan’s target cuts reflect a more cautious outlook even though both kept favorable ratings. Weak smartphone royalties offset AI data-center growth

Wall Street Analyst Weigh In

ARM has been the topic of a number of research analyst reports. JPMorgan Chase & Co. lowered their price target on ARM from $255.00 to $245.00 and set an "overweight" rating on the stock in a report on Thursday. Benchmark began coverage on ARM in a research report on Thursday, July 16th. They issued a "hold" rating for the company. Royal Bank Of Canada lowered their target price on shares of ARM from $340.00 to $300.00 and set an "outperform" rating on the stock in a research note on Thursday. TD Cowen decreased their price objective on shares of ARM from $350.00 to $250.00 and set a "buy" rating for the company in a report on Thursday. Finally, Rosenblatt Securities cut their target price on shares of ARM from $270.00 to $250.00 and set a "buy" rating for the company in a research report on Friday, July 31st. Nineteen investment 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's stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $291.72.

ARM Price Performance

The company's 50-day simple moving average is $254.39 and its two-hundred day simple moving average is $229.59. The firm has a market capitalization of $186.51 billion, a P/E ratio of 200.71, a P/E/G ratio of 5.60 and a beta of 3.93.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings data on Wednesday, November 4th. The company reported $0.52 earnings per share (EPS) 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 net margin of 17.13% and a return on equity of 11.86%. The company's revenue for the quarter was up 27.1% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.39 EPS. Analysts predict that Arm Holdings PLC Sponsored ADR will post 1.17 earnings per share for the current year.

Insider Activity at ARM

In other news, CFO Jason Child sold 10,400 shares of the firm's stock in a transaction dated Monday, September 21st. The stock was sold at an average price of $300.00, for a total value of $3,120,000.00. Following the transaction, the chief financial officer owned 153,442 shares of the company's stock, valued at $46,032,600. This trade represents a 6.35% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Hedge Funds Weigh In On ARM

Several large investors have recently added to or reduced their stakes in ARM. Arrowstreet Capital Limited Partnership lifted 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 worth $142,983,000 after purchasing an additional 872,644 shares during the last quarter. Janus Henderson Group PLC purchased a new stake in ARM during the first quarter worth $116,112,000. Hyperion Asset Management Ltd grew its stake in ARM by 36.9% in the third quarter. Hyperion Asset Management Ltd now owns 727,273 shares of the company's stock valued at $210,662,000 after purchasing an additional 195,942 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. bought a new position in shares of ARM during the 3rd quarter worth approximately $179,998,000. Finally, Altshuler Shaham Ltd boosted its position in shares of ARM by 202.6% in the 1st quarter. Altshuler Shaham Ltd now owns 478,289 shares of the company's stock worth $72,356,000 after purchasing an additional 320,236 shares in the last quarter. Hedge funds and other institutional investors own 7.53% of the company's stock.

About ARM

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.

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