ARM (NASDAQ:ARM) Shares Gap Down on 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 trading hands.

ARM has been the topic of a number of other research reports. New Street Research raised shares of ARM from a “neutral” rating to a “buy” rating and set a $260.00 target price on the stock in a research report on Thursday, July 30th. Bank of America reaffirmed a “neutral” rating and issued a $335.00 price target (up from $245.00) on shares of ARM in a research report on Thursday, July 30th. The Goldman Sachs Group reiterated a “sell” rating and set a $160.00 price objective on shares of ARM in a research note on Thursday. Rosenblatt Securities dropped their price objective on shares of ARM from $270.00 to $250.00 and set a “buy” rating on the stock in a research note on Friday, July 31st. Finally, Barclays cut their price objective on shares of ARM from $360.00 to $325.00 and set an “overweight” rating on the stock in a report on Thursday. Nineteen equities research 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. Based on data from MarketBeat, the stock presently has a consensus 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 ARM 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 in the company, valued at $46,032,600. The trade was a 6.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

ARM News Roundup

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 Inflows and Outflows

A number of institutional investors and hedge funds have recently modified their holdings of the company. Hyperion Asset Management Ltd lifted its position in ARM by 36.9% during the third quarter. Hyperion Asset Management Ltd now owns 727,273 shares of the company’s stock valued at $210,662,000 after acquiring an additional 195,942 shares during the last quarter. Mirae Asset Global Investments Co. Ltd. purchased a new position in ARM in the third quarter worth $179,998,000. Arrowstreet Capital Limited Partnership increased 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 in the last quarter. ProShare Advisors LLC increased its position in shares of ARM by 2.2% during the third quarter. ProShare Advisors LLC now owns 421,817 shares of the company’s stock worth $122,184,000 after purchasing an additional 9,242 shares in the last quarter. Finally, Janus Henderson Group PLC acquired a new position in shares of ARM during the first quarter worth $116,112,000. Hedge funds and other institutional investors own 7.53% of the company’s stock.

ARM Stock Performance

The firm has a fifty day moving average price of $252.78 and a 200 day moving average price of $229.93. The stock has a market cap of $186.51 billion, a PE ratio of 200.71, a price-to-earnings-growth ratio of 5.84 and a beta of 3.93.

ARM (NASDAQ:ARM) last announced its earnings results on Wednesday, November 4th. The company reported $0.52 earnings per share for the quarter, topping 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 firm had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.38 billion. During the same period in the previous year, the business earned $0.39 EPS. The firm’s revenue for the quarter was up 27.1% on a year-over-year basis. On average, equities research analysts forecast that Arm Holdings PLC Sponsored ADR will post 1.17 earnings per share for the current year.

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.