ARM (NASDAQ:ARM) Stock Price Down 3.3% – Should You Sell?

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM) shares dropped 3.3% on Friday. The company traded as low as $265.60 and last traded at $266.28. 4,230,559 shares were traded during trading, a decline of 45% from the average session volume of 7,645,470 shares. The stock had previously closed at $275.29.

ARM News Roundup

Here are the key news stories impacting ARM this week:

• Positive Sentiment: AI-server collaboration: Lattice Semiconductor is working with Arm to integrate FPGA-based control technology into AI servers. The partnership could support demand for Arm-based infrastructure as data-center operators expand AI capacity. Lattice Collaborates with Arm to Integrate FPGA-based Control for AI Servers
• Positive Sentiment: Broad AI exposure: Coverage says major AI platforms use Arm-based chips and that demand for the company’s flagship CPU has exceeded management’s projections. This reinforces the growth case tied to AI data-center construction. Wall Street May Be Underestimating Arm’s AI Opportunity
• Neutral Sentiment: Investor debate after a major rally: Arm’s approximately 143% year-to-date gain reflects optimism about AI and data centers, prompting investors to weigh taking profits against holding for additional growth. The debate underscores both strong momentum and elevated expectations. Arm Stock Is Up 143% This Year: Take Profits, or Hold On for the Ride?
• Negative Sentiment: Valuation concerns: Although the stock rebounded about 11.5% over the past month, analysts point to a forward price-to-sales multiple of roughly 43.5 times. That premium leaves ARM vulnerable to profit-taking or a slowdown in AI spending. ARM Stock Rebounds 11.5% in a Month: Is it a Buy Right Now?
• Negative Sentiment: OpenAI-related chip pressure: An OpenAI revenue report contributed to a selloff across chip stocks, and ARM fell with the sector. The episode shows that sentiment toward AI spending can weigh on ARM even when its long-term business exposure remains attractive. Arm Holdings Stock Fell 6% in a Day as an OpenAI Revenue Report Hit Chip Stocks
• Negative Sentiment: Qualcomm licensing trial: Arm and Qualcomm are in federal court over licensing terms and potentially billions of dollars in royalty payments. An unfavorable outcome could affect Arm’s royalty revenue or licensing structure, while the dispute adds uncertainty to its relationship with a major customer. Arm Holdings Heads To Trial Over Billions In Royalty Payments

Analyst Ratings Changes

Several equities research analysts recently commented on ARM shares. Wells Fargo & Company lowered their price target on ARM from $350.00 to $280.00 and set an “overweight” rating for the company in a research note on Thursday, July 30th. Susquehanna lifted their target price on shares of ARM from $300.00 to $320.00 and gave the company a “positive” rating in a research note on Tuesday, July 21st. Rosenblatt Securities decreased their target price on shares of ARM from $270.00 to $250.00 and set a “buy” rating for the company in a research report on Friday, July 31st. Bank of America restated a “neutral” rating and set a $335.00 price target (up from $245.00) on shares of ARM in a research note on Thursday, July 30th. Finally, Raymond James Financial restated an “outperform” rating and set a $166.00 price target on shares of ARM in a report on Tuesday, August 25th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $303.32.

ARM Stock Down 3.3%

The stock has a market cap of $284.41 billion, a P/E ratio of 274.52, a PEG ratio of 8.73 and a beta of 3.78. The business has a 50-day simple moving average of $269.58 and a 200-day simple moving average of $265.87.

ARM (NASDAQ:ARM) last released its quarterly earnings results on Thursday, July 30th. The company reported $0.45 EPS for the quarter, beating analysts’ consensus estimates of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The company had revenue of $1.29 billion for the quarter, compared to analyst estimates of $1.26 billion. During the same quarter last year, the firm posted $0.35 earnings per share. The company’s quarterly revenue was up 22.4% compared to the same quarter last year. On average, analysts predict that Arm Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Buying and Selling

In other 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 directly owned 153,442 shares in the company, valued at approximately $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 SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Institutional Investors Weigh In On ARM

Several hedge funds have recently made changes to their positions in ARM. Syntax Research Inc. bought a new position in ARM during the first quarter valued at about $30,000. Evelyn Partners Investment Management Services Ltd bought a new stake in shares of ARM during the first quarter valued at approximately $30,000. Motiv8 Investments LLC bought a new stake in shares of ARM during the fourth quarter valued at approximately $38,000. Cassaday & Co Wealth Management LLC acquired a new position in shares of ARM in the first quarter valued at $40,000. Finally, Sterling Capital Management LLC raised its stake in shares of ARM by 1,400.0% in the first quarter. Sterling Capital Management LLC now owns 375 shares of the company’s stock valued at $57,000 after purchasing an additional 350 shares in the last quarter. Institutional investors own 7.53% of the company’s stock.

About ARM

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops intellectual property used to create energy-efficient computing products. Arm does not generally manufacture chips; instead, it licenses processor architectures, CPU cores, graphics technologies and related system IP to semiconductor companies and original equipment manufacturers, which incorporate them into their own products.

The company’s offerings include the Cortex family of CPUs for mobile, consumer, automotive and embedded applications; Neoverse platforms for cloud and data-center infrastructure; Mali graphics processing units; and Ethos neural processing units designed for artificial intelligence and machine-learning workloads.