ARM (NASDAQ:ARM) Shares Down 13.1% on Analyst Downgrade

Shares of Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) dropped 13.1% during mid-day trading on Thursday after JPMorgan Chase & Co. lowered their price target on the stock from $255.00 to $245.00. JPMorgan Chase & Co. currently has an overweight rating on the stock. ARM traded as low as $163.13 and last traded at $166.72. Approximately 15,272,072 shares changed hands during mid-day trading, an increase of 104% from the average daily volume of 7,474,902 shares. The stock had previously closed at $191.80.

ARM has been the subject of a number of other reports. Wells Fargo & Company reduced their price objective on shares of ARM from $280.00 to $255.00 and set an “overweight” rating for the company in a research note on Thursday. HSBC reaffirmed a “hold” rating and issued a $215.00 target price on shares of ARM in a research report on Thursday. Raymond James Financial reiterated an “outperform” rating and set a $166.00 target price on shares of ARM in a report on Tuesday, August 25th. Needham & Company LLC reissued a “buy” rating and set a $255.00 price target on shares of ARM in a research report on Thursday. Finally, Morgan Stanley increased their price target on ARM from $202.00 to $212.00 and gave the company an “equal weight” rating in a research report on Thursday, July 30th. Nineteen investment analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $293.72.

Insider Buying and Selling at ARM

In other news, CFO Jason Child sold 10,400 shares of the company’s stock in a transaction dated 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 sale, the chief financial officer directly owned 153,442 shares of the company’s stock, valued at approximately $46,032,600. This represents a 6.35% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Trending Headlines about ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: AI and data-center demand remain strong: data-center royalties more than doubled, licensing revenue rose about 50%, and Arm reported record chip shipments. Management also expressed confidence in its AGI CPU opportunity, with identified demand that could support up to $2 billion in revenue across fiscal 2027–28. Arm Holdings’ Q2 Earnings Call Centers on AGI CPU Expansion
• Positive Sentiment: Arm’s revenue and earnings beat analysts’ estimates, and its outlook for the next quarter was reported above expectations, reflecting continued AI-related demand. Arm forecasts third-quarter revenue above estimates
• Neutral Sentiment: Longer-term AI prospects include Oracle’s plan to offer Arm AGI CPU instances in 2027 and Arm’s claim that its chips power more than half of hyperscaler servers; the financial impact will depend on adoption and production volumes. Oracle Cloud plans to offer Arm AGI CPU instances in 2027
• Negative Sentiment: Investors were concerned that smartphone royalties were weaker than expected, with rising memory costs potentially pressuring handset demand. Overall recurring royalty growth also lagged licensing growth, highlighting that chip shipments do not necessarily convert quickly into higher royalty revenue. Weak smartphone royalties offset AI data-center growth
• Negative Sentiment: With expectations and valuation still elevated, the earnings beat may not have been enough to satisfy investors seeking faster, broader royalty growth. Chip-sector concerns—including possible packaging-substrate constraints—added to pressure on the shares. Arm Stock Has an Apple and Android Problem

Hedge Funds Weigh In On ARM

Institutional investors have recently bought and sold shares of the business. Silver Grove Financial Group Inc. lifted its position in shares of ARM by 47.2% in the third quarter. Silver Grove Financial Group Inc. now owns 209 shares of the company’s stock valued at $61,000 after buying an additional 67 shares during the last quarter. Northbridge Financial Group LLC bought a new position in shares of ARM during the 3rd quarter worth approximately $210,000. Lido Advisors LLC increased its holdings in shares of ARM by 17.1% during the 3rd quarter. Lido Advisors LLC now owns 19,621 shares of the company’s stock worth $5,683,000 after acquiring an additional 2,867 shares during the last quarter. Cornerstone Wealth Management LLC increased its holdings in shares of ARM by 2.3% during the 3rd quarter. Cornerstone Wealth Management LLC now owns 4,183 shares of the company’s stock worth $1,212,000 after acquiring an additional 95 shares during the last quarter. Finally, New York Life Investment Management LLC acquired a new position in shares of ARM during the 3rd quarter worth approximately $295,000. Institutional investors and hedge funds own 7.53% of the company’s stock.

ARM Trading Down 13.1%

The business has a 50 day moving average of $256.08 and a two-hundred day moving average of $229.28. The firm has a market cap of $178.07 billion, a P/E ratio of 171.88, a PEG ratio of 5.91 and a beta of 3.93.

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

About ARM

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops central processing unit (CPU) architectures and related intellectual property. Rather than manufacturing chips itself, Arm licenses its designs and instruction-set architectures to semiconductor companies and technology manufacturers, which incorporate them into their own products.

The company’s offerings include CPU processor cores, graphics processing units through its Mali product family, system IP, development tools and software.