UK-based chip designer Arm Holdings plc (ARM) has been soaring on the wings of the artificial intelligence (AI) wave, propelling its shares to remarkable heights. Its innovative chip designs have cemented its position as a pivotal player for tech behemoths like Advanced Micro Devices, Apple, Nvidia, and Qualcomm.
Arm’s ambitious aim to hit 100 billion AI-ready devices by the next year, combined with its speedy inclusion in the Nasdaq-100 Index, vividly illustrate its massive impact on and expanding presence in the tech landscape.
About Arm Holdings Stock
Established in 1990, Arm Holdings plc (ARM) stands at the forefront of computing innovation with a market capitalization of approximately $118.9 billion. The company’s energy-efficient processors and software platforms power over 290 billion chips globally, driving advanced computing across various devices – from sensors to supercomputers.
In 2024, the chipmaker’s stock surged by close to 48%, significantly outperforming the S&P 500 Index’s year-to-date return of just 8.6%.
Arm Slides After Q1 Earnings
Following Arm’s fiscal 2025 Q1 earnings report in July, its stock plummeted by 15.7% in the subsequent trading session. Despite boasting a 39% year-over-year revenue spike to $939 million, driven by robust AI demand and growing compute subsystem adoption, the company faced heavy criticism due to its lackluster full-year forecast.
While the chipmaker’s revenue from royalties and licenses exhibited significant growth, its underwhelming guidance coupled with the decision to halt chip shipment disclosures sparked market pessimism.
What Do Analysts Expect For Arm Holdings Stock?
Despite the disappointing full-year guidance, several Wall Street analysts rushed to defend Arm Holdings post-Q1 earnings release. Analysts highlighted the company’s strategic advantages and long-term potential, standing by their “Buy” ratings with optimistic price targets.
The consensus among analysts leans towards a “Moderate Buy” rating for ARM stock, with projections hinting at a potential upside following the recent pullback.
