ARM (NASDAQ:ARM) Shares Gap Down Following Analyst Downgrade

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) gapped down prior to trading on Thursday after UBS Group lowered their price target on the stock from $320.00 to $270.00. The stock had previously closed at $191.80, but opened at $172.05. UBS Group currently has a buy rating on the stock. ARM shares last traded at $170.9430, with a volume of 2,622,359 shares.

A number of other equities analysts also recently commented on the stock. Barclays dropped their target price on shares of ARM from $360.00 to $325.00 and set an “overweight” rating on the stock in a research note on Thursday. HSBC reaffirmed a “hold” rating and set a $215.00 target price on shares of ARM in a research report on Thursday. KeyCorp boosted their price target on shares of ARM from $300.00 to $430.00 and gave the company an “overweight” rating in a report on Tuesday, July 14th. Piper Sandler reissued an “overweight” rating and issued a $270.00 price target (down from $320.00) on shares of ARM in a research report on Thursday. Finally, Bank of America reiterated a “neutral” rating and issued a $335.00 target price (up from $245.00) on shares of ARM in a report on Thursday, July 30th. Nineteen equities research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, ARM presently has an average rating of “Moderate Buy” and an average target price of $291.72.

Insider Transactions at ARM

In other ARM news, CFO Jason Child sold 10,400 shares of the firm’s stock in a transaction on Monday, September 21st. The shares were sold at an average price of $300.00, for a total value of $3,120,000.00. Following the completion of the transaction, the chief financial officer owned 153,442 shares of the company’s stock, valued at approximately $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 SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

ARM News Summary

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported fiscal Q2 revenue of $1.44 billion, ahead of estimates. Licensing revenue rose 50%, and data-center royalties doubled, highlighting demand for Arm technology in AI infrastructure. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: Arm’s push into its own AGI CPU could broaden its opportunity beyond chip-design royalties; management sees potential for up to $2 billion in revenue in fiscal 2027–28. Oracle has also said it plans to offer Arm AGI CPU instances in 2027. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: UBS and JPMorgan retained Buy/Overweight ratings despite cutting their price targets, indicating continued analyst confidence in potential upside. UBS analyst recommendations JPMorgan price target
• Neutral Sentiment: AI and data-center stocks faced market-wide pressure after midterm-election results raised concerns about a possible slowdown in data-center investment. Major indexes recovered some losses Friday, offering a more supportive backdrop, though uncertainty remains. Tech executives react to post-midterm AI sell-off
• Negative Sentiment: Investors focused on weaker smartphone-related royalties and concerns that handset demand may soften, offsetting Arm’s strong data-center growth. Royalty revenue is recurring, so slower growth here may temper expectations for future earnings. Weak smartphone royalties offset AI data-center growth
• Negative Sentiment: Valuation concerns amplified the post-earnings selloff: investors questioned whether Arm’s high expectations are justified even after the quarterly revenue beat. UBS cut its target from $320 to $270, and JPMorgan lowered its target from $255 to $245. Arm stock slides as results stoke valuation doubts

Institutional Trading of ARM

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Moors & Cabot Inc. lifted its stake in ARM by 13.0% during the 3rd quarter. Moors & Cabot Inc. now owns 2,667 shares of the company’s stock valued at $773,000 after acquiring an additional 306 shares during the period. ICICI Prudential Asset Management Co Ltd raised its stake in shares of ARM by 1.5% during the 3rd quarter. ICICI Prudential Asset Management Co Ltd now owns 7,117 shares of the company’s stock valued at $2,062,000 after buying an additional 106 shares during the last quarter. Allworth Financial LP lifted its holdings in shares of ARM by 12.3% in the 3rd quarter. Allworth Financial LP now owns 2,548 shares of the company’s stock valued at $738,000 after buying an additional 279 shares during the period. Fisher Asset Management LLC lifted its holdings in shares of ARM by 18.4% in the 3rd quarter. Fisher Asset Management LLC now owns 1,120 shares of the company’s stock valued at $325,000 after buying an additional 174 shares during the period. Finally, Russell Investments Group Ltd. boosted its stake in shares of ARM by 77.0% in the third quarter. Russell Investments Group Ltd. now owns 13,912 shares of the company’s stock worth $4,030,000 after buying an additional 6,053 shares during the last quarter. Institutional investors and hedge funds own 7.53% of the company’s stock.

ARM Stock Up 4.7%

The stock has a market cap of $186.51 billion, a PE ratio of 200.71, a P/E/G ratio of 5.84 and a beta of 3.93. The business has a 50 day moving average price of $252.78 and a 200 day moving average price of $229.93.

ARM (NASDAQ:ARM) last issued its quarterly earnings results on Wednesday, November 4th. The company reported $0.52 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.48 by $0.04. ARM had a return on equity of 12.24% and a net margin of 20.25%. The company had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.38 billion. During the same quarter in the prior year, the business posted $0.39 earnings per share. ARM’s revenue for the quarter was up 27.1% on a year-over-year basis. On average, research analysts predict that Arm Holdings PLC Sponsored ADR will post 1.17 earnings per share for the current fiscal year.

ARM Company Profile

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.