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Arm Holdings Slumps 14% in Premarket Trading Despite Q2 BeatShares of Arm Holdings plc ( NASDAQ:ARM ) plummeted in premarket trading on Thursday, shedding nearly 14% despite reporting better-than-expected fiscal first-quarter results. The British chipmaker's stock faced a sharp decline following the release of its quarterly results after the market closed on Wednesday. Solid Earnings Overshadowed by Royalty Revenue Concerns Arm Holdings reported record revenue of $939 million for the fiscal first quarter ended June 30, marking a 39% year-over-year increase and surpassing analyst expectations of $912 million according to Visible Alpha. The company also posted diluted earnings per share of 21 cents, significantly higher than the 10 cents reported in the same quarter last year and above the anticipated 16 cents. The robust earnings were driven by a substantial 72% increase in licensing and other revenue, which reached $472 million. However, the upbeat results were overshadowed by concerns over royalty revenue, which, although it grew 17% to $67 million, fell short of forecasts. This shortfall was attributed to lower-than-expected sales of chips, which forms a critical part of Arm's business model. Full-Year Guidance Maintained, but Market Unimpressed Arm maintained its full-year guidance, which aligns with the consensus estimate, but this did not quell investor concerns. The company projected adjusted earnings per share between 23 cents and 27 cents for the current quarter, in line with previous guidance but below some analyst estimates. Notably, this quarter marked the first time Arm did not raise its outlook, a move that some analysts, including Needham's Charles Shi, interpreted negatively given the stock's high valuation. Strategic Shift and Reporting Changes Arm also announced a strategic shift in its reporting practices, deciding not to disclose unit chip shipment data going forward. The company cited the decreasing relevance of this metric as it pivots towards focusing on low-volume, high-value chips. This change reflects Arm's strategy to target higher-margin markets and products, leveraging its Armv9-based chips' penetration to drive future growth. Market Reaction and Analyst Commentary Despite a strong revenue and earnings beat, the market reacted negatively, with Arm's shares plummeting over 12% in after-hours trading after an 8% increase during the regular session. The stock, which has surged over 90% year-to-date in 2024, shows some potential for recovery, as indicated by a Relative Strength Index (RSI) of 31.31. Analysts have mixed reactions to Arm's results and guidance. While the robust licensing revenue growth is a positive sign, the slower-than-expected royalty revenue and unchanged full-year outlook raise concerns about the company's ability to sustain its growth momentum amid a competitive and rapidly evolving semiconductor industry. Conclusion Arm Holdings' latest financial results showcase the company's strong performance and strategic focus on high-value products. However, the market's reaction underscores the challenges it faces in meeting high investor expectations and navigating the complexities of the semiconductor market. As Arm continues to adapt its business model and reporting practices, the coming quarters will be crucial in determining whether it can sustain its impressive growth trajectory and regain investor confidence.
NASDAQ:ARMLong
by DEXWireNews
ARM HoldingsARM witnessed a strong rebound after forming a new higher low at 149.50$, violating the last peak 177.31 by today's session. then, the remaining above this peak 177.31, will confirm the major uptrend, which will push ARM to witness further rises near 185.32 - 194.50 - 205 - 212.50 in the short term. The stop-loss lies below 169.60$. the indicators are heading toward the positive side, which confirms the mentioned positive scenario. The information and publications are not intended to be or constitute any financial, investment, commercial, or other types of advice or recommendations provided.
NASDAQ:ARMLong
by Gehad_Abouelela
a clear path to 180The question is, can it break the 180 and move on to 200? That's the question; the reset has begun even though it went to 155, which was the center line on the BB, but the stochastic is still at 60. Even though it declined, it is persistently holding this spot but is inconsistent in how far down it goes. With RSI at the high 50s, a trendline was also formulated; the bulls have every right to fight the bullish zone; although I Believe it can take it to mid-180, I also see it back in the 140s as the full reset hasn't occurred, so the sentiment of the market has been bullish incredibly tech reaching an all-time high of 500 seems to be driving the markets insanely crazy. Still, we have to follow basic 101 as well and see some relief in the mark. As the single moving average for 100 days gets closer, it could meet from a jump and retrace bouncing off the SMA and BB support levels. We shall wait & see.
NASDAQ:ARM
by themoneyman80
Arm HoldingArm witnessed a sharp rebound in yesterday's session, violating the major resistance 164, and the confirmation of that breakout by remaining above 164, will confirm the major uptrend, which will trigger further rises near 176.55 - 185.32 - 190 - 196.50 - 212.50. The stop-loss lies below 159.30. the indicators are heading toward the positive side, which confirms the mentioned positive scenario. The information and publications are not intended to be or constitute any financial, investment, commercial, or other types of advice or recommendations provided.
NASDAQ:ARMLong
by Gehad_Abouelela