ARM (NASDAQ:ARM) Announces Earnings Results, Beats Expectations By $0.02 EPS

ARM (NASDAQ:ARM) posted its earnings results on Wednesday. The company reported $0.43 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.41 by $0.02, FiscalAI reports. The business had revenue of $1.24 billion for the quarter, compared to analysts’ expectations of $1.23 billion. ARM had a net margin of 17.15% and a return on equity of 14.36%. The business’s revenue for the quarter was up 26.3% compared to the same quarter last year. During the same period in the prior year, the company posted $0.39 EPS. ARM updated its Q4 2026 guidance to 0.540-0.620 EPS.

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

• Record quarter — revenue and royalties surged: Revenue rose 26% YoY to $1.24B and royalties grew 27% to a record $737M, driven by strength in AI and general-purpose data center and higher royalty rates in smartphones.
• Data center and AI tailwinds accelerating: Data center royalties grew >100% YoY, Neoverse CPUs have surpassed 1 billion cores deployed, and management expects Arm share among top hyperscalers to reach ~50%, supporting sustained royalty growth.
• CSS adoption is driving higher value per chip: Arm now has 21 CSS licenses (5 customers shipping CSS silicon) and says CSS shortens time-to-market and increases royalty content per device, creating a material long-term tailwind.
• Investing heavily in R&D while guiding growth: Non-GAAP OpEx rose 37% as Arm expands engineering headcount for next‑gen architectures and chiplet/SoC work, while Q4 revenue guidance midpoint is $1.47B with EPS $0.58 ± $0.04.
• Memory/smartphone unit risks are acknowledged but limited: Management estimates potential memory-driven smartphone volume cuts would have a modest impact (roughly 1–2% on total royalties) and say cloud AI growth largely offsets mobile weakness.

ARM Stock Performance

Shares of ARM stock opened at $110.88 on Friday. ARM has a 52-week low of $80.00 and a 52-week high of $183.16. The company has a fifty day moving average of $117.37 and a 200-day moving average of $138.33. The stock has a market capitalization of $117.15 billion, a price-to-earnings ratio of 147.84, a price-to-earnings-growth ratio of 6.28 and a beta of 4.35.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the stock. FWL Investment Management LLC bought a new stake in shares of ARM in the 2nd quarter valued at about $34,000. WFA of San Diego LLC purchased a new position in ARM in the 2nd quarter worth approximately $49,000. State of Wyoming bought a new stake in ARM in the second quarter valued at approximately $102,000. Larson Financial Group LLC boosted its stake in shares of ARM by 5,066.7% during the third quarter. Larson Financial Group LLC now owns 775 shares of the company’s stock valued at $110,000 after purchasing an additional 760 shares during the period. Finally, Brevan Howard Capital Management LP bought a new position in shares of ARM in the third quarter worth approximately $255,000. 7.53% of the stock is owned by institutional investors.

More ARM News

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Q3 results beat on revenue and EPS, driven by AI/data-center demand; revenue rose ~25–26% YoY and total revenue topped estimates. This supports ARM’s growth story outside handsets. Why Arm Holdings Stock Was Climbing Today
• Positive Sentiment: Management highlighted rapid expansion in the data‑center/AI business (CEO Rene Haas called it “exploding”), suggesting a potential re‑rate if server/cloud adoption continues. Tech Earnings: Google’s Spending, Arm’s AI Data Center Push | Bloomberg Tech 2/5/2026
• Positive Sentiment: ARM guided Q4 above Street revenue/earnings consensus (EPS guide 0.540–0.620 vs. consensus ~0.49; revenue guide above estimates), which supports near‑term topline momentum. Arm Holdings forecasts quarterly revenue above estimates on AI chip demand
• Neutral Sentiment: New product/marketing event planned: “Arm Everywhere” event set for March 24 — a platform to showcase AI strategy but not immediate revenue. Arm to Host ‘Arm Everywhere’ Event and Webcast
• Negative Sentiment: Licensing revenue narrowly missed estimates and licensing weakness pressured after‑hours trading; investors are worried about handset royalty cadence. Shares of Arm plunge 8% after licensing revenue misses estimates, Qualcomm outlook adds pressure
• Negative Sentiment: Industry headwind: a memory shortage is prompting phone makers to trim build plans, which could constrain ARM’s handset-related royalties and chip design demand. That dynamic weighed on ARM and peers like Qualcomm. Qualcomm, Arm bear brunt of memory shortage as smartphone chip sales disappoint
• Negative Sentiment: Several firms trimmed price targets (JPMorgan, TD Cowen, Wells Fargo, Mizuho, Rosenblatt) even as many kept buy/overweight ratings — a mixed analyst reaction that adds volatility and signals caution on near‑term handset exposure. JPMorgan target cut coverage
• Negative Sentiment: Despite revenue growth, profit fell and some investors flagged guidance as merely in‑line, which triggered short‑term selling pressure. Arm Holdings Third-Quarter Profit Falls Despite Revenue Growth

Wall Street Analyst Weigh In

Several equities analysts recently commented on ARM shares. Weiss Ratings restated a “hold (c)” rating on shares of ARM in a research report on Wednesday, January 21st. Loop Capital boosted their price objective on ARM from $155.00 to $180.00 and gave the stock a “buy” rating in a report on Wednesday, November 12th. KeyCorp reaffirmed an “overweight” rating on shares of ARM in a research note on Thursday. Royal Bank Of Canada decreased their price target on shares of ARM from $140.00 to $130.00 and set an “outperform” rating on the stock in a report on Thursday. Finally, Raymond James Financial started coverage on shares of ARM in a report on Friday, November 21st. They set a “hold” rating for the company. Sixteen equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $160.81.

About ARM

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.