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

ARM (NASDAQ:ARM) issued its quarterly earnings results on Wednesday. The company reported $0.60 earnings per share for the quarter, topping analysts’ consensus estimates of $0.58 by $0.02, FiscalAI reports. ARM had a net margin of 18.37% and a return on equity of 12.80%. The company had revenue of $1.49 billion during the quarter, compared to the consensus estimate of $1.47 billion. During the same quarter in the prior year, the firm posted $0.55 EPS. The firm’s quarterly revenue was up 20.1% on a year-over-year basis. 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 Price Performance

Shares of ARM stock traded down $0.16 during trading hours on Friday, hitting $213.15. The stock had a trading volume of 5,408,232 shares, compared to its average volume of 7,662,541. The stock’s 50-day moving average price is $154.24 and its two-hundred day moving average price is $138.41. ARM has a one year low of $100.02 and a one year high of $239.50. The stock has a market capitalization of $225.20 billion, a price-to-earnings ratio of 254.08, a PEG ratio of 10.67 and a beta of 3.40.

Insiders Place Their Bets

In other news, CFO Jason Child sold 21,280 shares of the firm’s stock in a transaction that occurred on Wednesday, March 25th. The shares were sold at an average price of $148.37, for a total transaction of $3,157,313.60. Following the transaction, the chief financial officer directly owned 174,706 shares of the company’s stock, valued at approximately $25,921,129.22. This trade represents a 10.86% 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. Also, CEO Rene A. Haas sold 23,867 shares of the stock in a transaction that occurred on Wednesday, March 25th. The stock was sold at an average price of $161.17, for a total value of $3,846,644.39. Following the completion of the transaction, the chief executive officer directly owned 290,965 shares in the company, valued at approximately $46,894,829.05. This trade represents a 7.58% decrease in their position. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 83,712 shares of company stock valued at $13,614,730.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in ARM. FWL Investment Management LLC purchased a new stake in ARM during the second quarter worth $34,000. Mcguire Capital Advisors Inc. bought a new position in shares of ARM during the 4th quarter worth approximately $30,000. WFA of San Diego LLC purchased a new position in ARM in the second quarter worth $49,000. Intesa Sanpaolo Wealth Management purchased a new stake in shares of ARM during the 4th quarter valued at $52,000. Finally, Greenline Wealth Management LLC purchased a new position in ARM during the 4th quarter worth $56,000. 7.53% of the stock is currently owned by institutional investors.

Key Stories Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Quarterly beat and upbeat guidance — Arm beat revenue and EPS estimates, guided first‑quarter revenue above Street expectations and disclosed more than $2 billion of customer demand for its new data‑center CPU, supporting the long‑term AI thesis. Arm forecasts upbeat revenue
• Positive Sentiment: Analyst upgrades and higher targets — Several firms (Wells Fargo, Guggenheim, Needham, Rosenblatt, Mizuho) raised price targets or reiterated bullish ratings after the results, supporting upside views on Arm’s AI opportunity. Analyst coverage roundup
• Positive Sentiment: Goldman’s recent (5/8) forecast framed as constructive — a fresh note highlighted the opportunity and updated its outlook in a way that some investors read as supportive. Goldman Sachs issues forecast
• Neutral Sentiment: CEO commentary: AI demand offsetting phone slump — Management told media that cloud AI demand is growing strongly while smartphone revenue is slowing; this helps the long‑term story but complicates near‑term optics. Bloomberg Tech interview
• Neutral Sentiment: Industry factors: AI-driven component shortages could push smartphone prices higher — broader memory/supply dynamics may indirectly affect Arm’s handset revenue and timing. Investopedia on smartphone pricing
• Negative Sentiment: Smartphone weakness and supply constraints knocked shares lower — despite the beat, management warned the phone market is soft and capacity to meet surging AI demand may be limited; that message triggered a >10% intraday drop as investors worried about near‑term monetization. Chip designer warns of smartphone weakness
• Negative Sentiment: Execution and valuation concerns — Bank of America and other analysts warned the AI CPU growth story may already be priced in and that execution/timing risks could limit near‑term upside. ProactiveInvestors on investor concerns
• Negative Sentiment: Volatility: after‑hours rally erased overnight — investors saw a large after‑hours spike on the beat, then profit‑taking and skepticism wiped out gains, illustrating short‑term trading risk. Invezz on volatility

Analyst Ratings Changes

A number of analysts have weighed in on ARM shares. KeyCorp restated an “overweight” rating on shares of ARM in a research report on Thursday, February 5th. Benchmark reissued a “hold” rating on shares of ARM in a research note on Thursday, February 5th. HSBC raised shares of ARM from a “reduce” rating to a “buy” rating and lifted their price objective for the stock from $90.00 to $205.00 in a research report on Friday, March 20th. Jefferies Financial Group restated a “buy” rating on shares of ARM in a research note on Thursday. Finally, JPMorgan Chase & Co. dropped their price target on shares of ARM from $180.00 to $145.00 and set an “overweight” rating on the stock in a research note on Thursday, February 5th. Nineteen 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’s stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus price target of $199.61.

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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