ARM (NASDAQ:ARM) Issues Earnings Results

ARM (NASDAQ:ARM) issued its quarterly earnings results on Wednesday. The company reported $0.45 EPS for the quarter, topping the consensus estimate of $0.40 by $0.05, FiscalAI reports. ARM had a return on equity of 12.43% and a net margin of 18.37%.The company had revenue of $1.29 billion for the quarter, compared to the consensus estimate of $1.26 billion. ARM updated its Q2 2027 guidance to 0.430-0.510 EPS.

Here are the key takeaways from ARM’s conference call:

• Record Q1 results: Revenue rose 22% year over year to $1.29 billion, while licensing and royalty revenue both reached records; non-GAAP EPS of $0.45 exceeded the high end of guidance.
• Accelerating data-center momentum: Data-center royalty revenue more than doubled again, supported by deployments from major hyperscalers and growing adoption of Arm Neoverse CPUs, whose cumulative shipments have surpassed 1.5 billion cores.
• Arm AGI CPU demand is strengthening: Demand for the new CPU now exceeds $2 billion versus the initially secured $1 billion opportunity for fiscal 2027–2028, and management’s confidence in exceeding $1 billion has increased as additional manufacturing capacity is secured.
• Smartphone market weakness is pressuring royalties: Higher memory prices are weighing on handset demand across more market segments, leading management to reduce its royalty-growth expectation for the year from roughly 20% to the high teens, although cloud AI growth is helping offset the impact.
• Continued investment and near-term guidance: Operating expenses are rising as Arm expands engineering efforts for next-generation architectures and AGI CPUs; Q2 revenue is guided to $1.38 billion at the midpoint, with royalty growth in the low teens and licensing growth of about 30%.

ARM Price Performance

ARM stock traded down $19.85 during trading hours on Wednesday, reaching $224.89. The stock had a trading volume of 9,243,659 shares, compared to its average volume of 8,575,546. The stock has a 50-day simple moving average of $331.09 and a 200 day simple moving average of $211.79. The stock has a market capitalization of $240.20 billion, a PE ratio of 267.73, a price-to-earnings-growth ratio of 8.28 and a beta of 3.76. ARM has a fifty-two week low of $100.02 and a fifty-two week high of $452.70.

Trending Headlines about ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm reported record first-quarter revenue of $1.29 billion, up 22% year over year, while earnings per share reached $0.45 versus the $0.40 analyst consensus. Both results exceeded expectations. Arm Holdings beats Q1 estimates, shares fall in after-hours
• Positive Sentiment: The company forecast second-quarter EPS of $0.43 to $0.51, above the $0.39 consensus estimate, and projected quarterly revenue above Wall Street expectations. The outlook reflects continued demand for Arm-based designs in AI data centers. Arm forecasts quarterly revenue above estimates on AI-driven chip demand
• Positive Sentiment: Demand from hyperscale cloud companies, including Alphabet and Amazon, is supporting Arm’s licensing revenue and royalty growth as increasingly complex AI and data-center chips are shipped. Arm shares dive after hours despite forecasts above estimates
• Neutral Sentiment: Management published its fiscal 2027 first-quarter shareholder letter, providing the formal results and outlook for investors. Arm Holdings plc Reports Results for the First Quarter
• Negative Sentiment: Despite the earnings and guidance beats, shares fell nearly 7% in after-hours trading because investors viewed the sales outlook as insufficiently impressive relative to the market’s very high expectations for AI growth. Analysts also noted that Arm’s premium valuation leaves little room for an merely solid quarter. Qualcomm and Arm Forecasts Fail to Impress Investors

Insiders Place Their Bets

In related news, insider Charlotte Claire Eaton sold 7,805 shares of the company’s stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $290.01, for a total transaction of $2,263,528.05. Following the completion of the sale, the insider owned 5,000 shares of the company’s stock, valued at $1,450,050. This represents a 60.95% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CAO Laura Kathleen Bartels sold 11,306 shares of ARM stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $392.70, for a total value of $4,439,866.20. Following the completion of the transaction, the chief accounting officer owned 12,135 shares in the company, valued at approximately $4,765,414.50. The trade was a 48.23% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 216,049 shares of company stock worth $52,101,605 in the last quarter.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of the company. CreativeOne Wealth LLC raised its holdings in ARM by 5.0% in the 4th quarter. CreativeOne Wealth LLC now owns 1,830 shares of the company’s stock valued at $200,000 after buying an additional 87 shares during the last quarter. Moors & Cabot Inc. lifted its holdings in shares of ARM by 5.3% during the third quarter. Moors & Cabot Inc. now owns 2,050 shares of the company’s stock worth $290,000 after purchasing an additional 103 shares during the period. ICICI Prudential Asset Management Co Ltd increased its holdings in ARM by 5.9% in the fourth quarter. ICICI Prudential Asset Management Co Ltd now owns 2,220 shares of the company’s stock valued at $243,000 after purchasing an additional 123 shares during the period. Mercer Global Advisors Inc. ADV raised its position in ARM by 0.7% during the 3rd quarter. Mercer Global Advisors Inc. ADV now owns 25,362 shares of the company’s stock worth $3,588,000 after purchasing an additional 185 shares during the last quarter. Finally, Schnieders Capital Management LLC. lifted its holdings in ARM by 9.0% during the 2nd quarter. Schnieders Capital Management LLC. now owns 2,430 shares of the company’s stock worth $393,000 after buying an additional 200 shares during the period. 7.53% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

A number of equities analysts recently issued reports on ARM shares. Weiss Ratings reaffirmed a “hold (c)” rating on shares of ARM in a research report on Friday, July 17th. Susquehanna upped their price target on ARM from $300.00 to $320.00 and gave the company a “positive” rating in a report on Tuesday, July 21st. Bank of America boosted their price objective on ARM from $335.00 to $460.00 and gave the company a “neutral” rating in a research report on Tuesday, June 23rd. Guggenheim increased their price objective on shares of ARM from $240.00 to $255.00 and gave the company a “buy” rating in a research note on Thursday, May 7th. Finally, KeyCorp upped their price objective on ARM from $300.00 to $430.00 and gave the company an “overweight” rating in a research note on Tuesday, July 14th. Seventeen analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, ARM presently has a consensus rating of “Moderate Buy” and a consensus target price of $297.65.

ARM Company Profile

Arm Limited (NASDAQ: ARM) is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm’s product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.