Arm Holdings plc American Depositary Shares

U.S. stocks were mixed on Thursday as a rebound in chipmakers and stronger-than-expected economic data helped offset a sell-off in software shares following disappointing earnings. The S&P 500 edged up 0.07%, the Dow fell 0.38%, and the Nasdaq 100 added 0.26%. Datadog tumbled over 14% after reporting second-quarter adjusted gross margin below consensus, dragging down other software names including Salesforce, Atlassian, and Workday. AppLovin sank 19% on a revenue miss, while memory chipmakers Western Digital and SanDisk fell sharply after SanDisk forecast first-quarter revenue of $10.30 billion to $10.80 billion, below the $11.16 billion consensus. Limiting losses, ARM Holdings rose more than 5% and ASML, ON Semiconductor, and Marvel Technology gained over 2%, while Paycom Software surged 22% after raising its full-year revenue outlook to $2.20 billion to $2.21 billion, above estimates. Weekly jobless claims rose by 1,000 to 199,000, better than the 205,000 expected, and second-quarter nonfarm productivity increased 1.4%, exceeding the 0.6% forecast. A Financial Times report that Fed Chair Warsh is willing to raise rates in September if inflation firms weighed on sentiment, while crude oil rose over 1% after Yemen's Houthi rebels said they targeted a Saudi oil tanker in the Gulf of Aden.

SoftBank Group reported a 17.7 percent year-on-year decline in net profit to 347.3 billion yen for the April–June quarter. The main factor was a foreign exchange loss of 146 billion yen stemming from US dollar-denominated debt, compared with a gain of 143.2 billion yen a year earlier. Revenue rose 10.9 percent to 2.0195 trillion yen, and investment income from core operations expanded nearly fourfold to 1.8593 trillion yen, helped by a rise in Intel shares. However, investment gains at subsidiary SoftBank Vision Fund fell sharply. UK-based Arm grew revenue on AI demand, but higher research and development costs widened the loss at its AI-related business, weighing on overall profit.

SoftBank Group reported better-than-expected quarterly results, boosted by an investment gain on Intel shares worth 1.3 trillion yen, or about 8.5 billion US dollars. Intel's stock price surged 216% during the April-to-June quarter, after SoftBank invested roughly 2 billion dollars last year at an average price of 23 dollars per share. This gain helped offset slowing returns from OpenAI and writedowns at some Vision Fund portfolio companies. Although SoftBank's net profit fell 18% to 347.3 billion yen, it still significantly exceeded analyst expectations of 166 billion yen. Meanwhile, SoftBank plans to increase its investment in OpenAI to nearly 65 billion dollars by October, using a 40-billion-dollar short-term loan and another 20 billion dollars backed by its Arm Holdings stake.

The global semiconductor IP market is projected to reach $18.64 billion by 2032, growing at a compound annual growth rate of 10.2% from 2026, according to a new report from ResearchAndMarkets.com. The market was valued at an estimated $9.30 billion in 2025. Security IP is expected to be the fastest-growing design IP segment, while hard IP is projected to outpace soft IP, and the RISC-V architecture is positioned for the fastest growth. Asia Pacific is forecast to remain the fastest-growing regional market, driven by investments in semiconductor self-sufficiency and expanding chip design ecosystems. Key players profiled include Arm, Synopsys, Cadence, Rambus, Alphawave Semi, and SiFive.

UK semiconductor and AI chip startup OLIX has secured $312 million in a Series B funding round at a valuation of $3.3 billion. Participants include Arm, Fundomo, Hudson River Trading, and individual investor Reed Hastings, with existing backers Plural, Hummingbird Ventures, Phoenix Court, Crane, Creandum, and Transition expanding their commitments. The company develops end-to-end infrastructure for frontier AI inference, including its X-1 platform that unrolls AI models across multiple chips and uses an optical interconnect for lower latency and energy costs. Its first chip, the DX-1 decode accelerator, delivers over 10,000 tokens per second per user and omits advanced packaging and high-bandwidth memory to avoid supply chain bottlenecks. The funds will be used to complete the DX-1 and expand the custom silicon platform, targeting initial customer access in the second half of 2027, while the company also adds Professor Nick McKeown to its board and appoints Matt Briers as CFO.

Intel shares fell to $81.19 from $100.23 just before its second-quarter earnings release, despite the company reporting revenue of $16.13 billion and adjusted earnings per share of $0.42, both exceeding Wall Street estimates. During the earnings call, analysts pressed management on capital spending increases, server market share against AMD and ARM, unexpected client segment strength, supply improvement timing, and the growth of the ASIC business. CFO David Zinsner said the capex rise is broad-based but skewed toward front-end fabs, reflecting confidence in customer demand, while CEO Lip-Bu Tan highlighted product roadmap advances and collaborations with ARM to regain server share. Zinsner attributed client strength to higher prices and mix but cautioned that underlying market softness persists, and he noted that supply bottlenecks in packaging and substrates will keep supply tight through year-end. Tan described the ASIC opportunity as significant and pointed to recent leadership hires and partnerships with memory vendors to address supply constraints.

Arm Holdings reported record fiscal first-quarter revenue of $1.29 billion, up 22% year-over-year, and adjusted earnings of $0.45 per share, beating Wall Street expectations of $0.40. CEO Rene Haas said customer demand for the company's new AGI CPU now exceeds $2 billion across fiscal 2027 and 2028, a chip designed specifically for agentic AI workloads that represents a major expansion beyond Arm's traditional licensing and royalty model. Royalty revenue increased 22% to $715 million, while licensing and other revenue climbed 23% to $574 million, and cloud AI and data-center royalties more than doubled year-over-year. For the second quarter, management expects revenue between $1.33 billion and $1.43 billion with adjusted EPS of $0.43 to $0.51. Analysts remain largely bullish, with Jefferies maintaining a Buy rating and $320 price target, J.P. Morgan raising its target to $255, and the consensus price target implying a 30% upside premium.

Arm Holdings reported fiscal first-quarter revenue of $1.3 billion, beating the Zacks Consensus Estimate by 1.8% and rising 22.4% year over year, while earnings of 45 cents per share surpassed estimates by 12.5% and grew 28.6% year over year. The company highlighted accelerating adoption of its architecture across cloud infrastructure, edge computing, and AI applications, with royalty revenues up 22% and licensing and other revenues up 23%. Zacks Equity Research notes that Arm’s expanding presence in hyperscale cloud, AI-enabled PCs, and autonomous systems provides multiple growth engines, but cautions that much of the optimism is already priced in, leaving limited room for missteps. The firm maintains a Zacks Rank #3 (Hold) on the stock, citing a balance between strong long-term fundamentals and elevated investor expectations.

Arm Holdings shares jumped as much as 19.4% Thursday after the semiconductor company reported record fiscal first-quarter results that topped Wall Street expectations. Arm posted adjusted earnings of $0.45 per share on revenue of $1.29 billion, beating analyst forecasts of $0.40 per share and $1.27 billion. The company guided for current-quarter revenue between $1.36 billion and $1.4 billion, above the $1.35 billion consensus, with adjusted earnings per share projected at $0.43 to $0.51. The stock also benefited from a broader market rebound following a sharp sell-off the prior day, with chip stocks leading the recovery.

Arm Holdings enters Wednesday's Q1 FY2027 earnings with its stock down nearly 28% over the past month. CEO Rene Haas confirmed more than $2 billion of customer demand across fiscal 2027 and fiscal 2028 for the Arm AGI CPU, double what was announced at launch six weeks earlier. Meta is the lead co-developer, while OpenAI, Cerebras, SAP, and Cloudflare are integrating. Data center royalty more than doubled year-over-year in FY2026 and is expected to double again in FY2027. Free cash flow reached $882 million in FY2026, up 395.51% year-over-year, with gross margin at 92.48%. NVIDIA's next-generation Vera CPU is Arm-based, so every Vera rack pays Arm a royalty, while Qualcomm faces declining revenue and a 55.4% gross margin. Arm's higher R&D spending is funding a data center business that management expects to reach $15 billion in annual revenue by FY2031.

Arm-based rack-scale GPU servers have overtaken x86 systems as the leading accelerated computing platform, according to new data from IDC. Global AI infrastructure spending reached $89.7 billion in the first quarter, and IDC now expects the market to hit $497 billion in 2026, up nearly 56% from a year earlier, with spending forecast to exceed $1 trillion by 2029. Arm accelerated server spending climbed to $53 billion in the first quarter, while x86 accelerated server spending fell to $34.6 billion as hyperscalers increasingly adopted Nvidia's rack-scale AI systems. The report also found that enterprises are expanding beyond GPU purchases into CPU-only inference clusters, AI orchestration software, and long-delayed storage upgrades, signaling a broader buildout of AI infrastructure.

NZS Capital's Growth Equity Strategy identified Arm Holdings as a notable contributor in its second-quarter 2026 investor letter. The portfolio returned +24.96% gross and +24.76% net, outperforming the Morningstar Global Target Market Exposure Index's +14.79% gain. Arm shares were lifted by the company's plan to develop its first in-house chip, a CPU for AI workloads, alongside an improving outlook for semiconductors. Arm reported record revenue of $1.49 billion in the fourth quarter of fiscal 2026, up 20% year-over-year, and closed at $269.61 per share on July 20, 2026, with a market capitalization of $286.87 billion.

Jefferies raised its price target on Arm Holdings to $320 from $290, citing an improving long-term growth outlook driven by rising demand for artificial intelligence workloads. The firm now expects Arm's AI CPU revenue to reach $18 billion in fiscal 2031, above the company's guidance of $15 billion, and sees the total addressable market for CPUs reaching $200 billion by 2030. Jefferies forecasts Arm's AI CPUs will capture at least a 15% share of that market, with Meta projected to become the largest customer, followed by OpenAI, Oracle, and ByteDance. The firm also raised its AI CPU revenue estimates for fiscal 2028 and 2029 to $1.5 billion and $3 billion, respectively, and highlighted data center royalty growth and a potential AI accelerator launch from SoftBank as additional opportunities. Jefferies expects Arm's revenue and earnings to grow more than 40% annually through fiscal 2031, with a five-year earnings per share compound annual growth rate of 45%.

ARM Holdings could become one of the most important royalty stories in semiconductors as AI pushes big tech deeper into custom silicon. The company may not build the chips, but it could own the foundation on which many of them depend. The analysis was published on July 17, 2026, using market prices from July 8, 2026.

Arm Holdings CEO commented on US export restrictions for AI-capable CPUs to China, highlighting the complexity of enforcing potential bans. The CEO pointed to stronger demand for Arm's AGI CPU, with customers such as ByteDance and Oracle now using the product. Arm is working with partners including TSMC, Oracle and Microsoft to secure key components across its supply chain for next-generation chips.

Arm Holdings is well-positioned to benefit from the next phase of AI adoption as customers increasingly require more advanced chip architectures. The company's licensing and royalty model is expanding as customers adopt Armv9 and Compute Subsystems, enabling ARM to capture greater value from every chip shipped through higher royalty rates and deeper customer integration. Nearly half of current royalty revenue is still generated by products introduced more than a decade ago, highlighting the durability of this stream. The introduction of the Arm AGI CPU further broadens monetization opportunities by allowing ARM to participate more directly in cloud AI infrastructure. Compared with semiconductor IP peers Synopsys and Cadence Design Systems, ARM is uniquely positioned with multiple revenue streams including licensing, recurring royalties, and higher-value AI compute solutions. The stock has surged 153% year to date, significantly outperforming the industry's 44% rally, and trades at a forward price-to-sales ratio of 44.93, well above the industry's 8.84. ARM currently carries a Zacks Rank of 3, or Hold.

Arteris has expanded its partnership with Arm to enhance semiconductor cybersecurity for AI chips. The collaboration builds on five years of joint work and integrates Arteris' Cycuity Radix hardware security assurance product into Arm's CPU design processes. The goal is to proactively address potential security vulnerabilities and strengthen the security assurance of processor cores, underscoring the importance of robust security measures from data centers to edge applications.

UBS raised its price target on Arm Holdings to $470 from $260 and kept a Buy rating on the shares. Mizuho also increased its target to $500 from $425 with an Outperform rating, citing accelerating agentic AI tailwinds as the company's platform expands with Oracle and ByteDance. Mizuho estimates Arm could generate $15 billion in agentic AI infrastructure CPU revenue by fiscal 2031. Arm reported its highest quarterly revenue ever in fiscal Q4 2026 at $1.49 billion, with full-year revenue of $4.92 billion and record full-year royalty revenue of $2.61 billion, driven by growth in Edge AI, smartphones, Physical AI, and Cloud AI where data center royalties more than doubled year-over-year.

Arm Holdings shares have surged 118% over the past year, outpacing the semiconductor industry's 83% gain, driven by investor optimism around artificial intelligence, cloud computing, and next-generation infrastructure. The company's expanding ecosystem, including its newly introduced Arm AGI CPU designed for agentic AI workloads, has attracted strong demand from cloud service providers and enterprise customers, with Arm-based processors now accounting for roughly half of CPU deployments across major hyperscale cloud providers. However, the stock trades at a forward price-to-sales ratio of 55.09 times, far above the industry average of 9.51 times, and carries a Value Score of F, suggesting much of the growth potential is already priced in. Analysts expect 21% sales growth and a 19% increase in earnings per share for the current fiscal year, but the premium valuation leaves limited room for disappointment if industry demand softens. Given its strong fundamentals but elevated valuation, ARM is rated a Hold, with investors advised to wait for a more attractive entry point.

The Euro Stoxx 50 index has risen 8.2% through June 30, nearly matching the S&P 500's 9.3% gain, driven by a weaker dollar, valuation re-rating, increased EU defense spending, and hawkish rate policy. Three components have delivered index-beating returns over the past 12 months: ArcelorMittal, up more than 90%, with analysts projecting earnings growth over 49% in the next year; Arm Holdings, up over 220% in 2026, with projected earnings growth of approximately 77%; and Novartis, up about 14% in 2026, with expected earnings growth around 11%. ArcelorMittal, a Netherlands-based steel giant, has been boosted by Q1 earnings and a share buyback program, while Arm Holdings, an England-based semiconductor IP company, remains a core AI infrastructure play despite recent volatility. Novartis, a Swiss biopharma firm, offers defensive growth through innovation and dividends, though it faces biosimilar threats and significant R&D spending.

U.S. stock futures climbed Monday morning as technology stocks began recovering from a bruising week and the U.S. and Iran agreed to halt hostilities over the Strait of Hormuz. Futures tied to the Dow Jones Industrial Average were up 188 points, a gain of 0.4%, with S&P 500 contracts adding 0.8% and Nasdaq 100 contracts climbing 1.2%. Among individual movers before the open, Arm shares were up 2.3%, Marvell was 1.6% higher, Micron Technology ticked up 0.7%, and Intel added 1.4%. The gains follow a difficult stretch for tech, with the Nasdaq Composite finishing last week down 4.6% and the S&P 500 losing nearly 2%, while the Dow managed a 0.6% gain. A weekend of military exchanges between Washington and Tehran had put peace negotiations at risk, but the two countries reached an agreement Sunday to halt fighting and reopen the Strait of Hormuz to commercial shipping. Oil prices moved higher, with international Brent crude climbing to around $72 to $73 a barrel and West Texas Intermediate futures rising to roughly $70 a barrel. A plan to break Comcast into two separate publicly traded entities sent the company's shares up 25% before the bell, and shares of SpaceX were poised for premarket gains following last week's announcement that the Nasdaq exchange will add the company to its 100-stock index as early as next month. With June drawing to a close, monthly scorecards show the S&P 500 off 3% and the Nasdaq down more than 6% since the start of the month, while the Dow has notched a gain of more than 1% over that stretch.

A newsletter interview with Porter Stansberry and Luke Lango pitches Arm Holdings as a key stock in what they call a second “1776 moment,” likening the current AI wave to the political, economic, and technological forces that shaped American prosperity. The duo points to a firm that designs blueprints for top-performing processors, which Gumshoe identifies as the British design house Arm Holdings. Arm shares have risen 134% over the past year and 219% year-to-date. Bank of America recently raised its price target on Arm to $335 from $245, citing agentic AI as a potential growth catalyst due to its reliance on CPUs.

Arm Holdings, IREN, and Nvidia are identified as top long-term AI investments. Arm expects to hold the largest share of data center CPUs by 2030, with record quarterly revenue of $1.49 billion, up 20% year over year. IREN has signed cloud contracts with Microsoft and Nvidia, is bringing 480 megawatts of new data center capacity online this year, and expects $4.4 billion in annualized revenue by the end of 2026. Nvidia's data center revenue nearly doubled last quarter, its new Vera CPUs are on track for $20 billion in revenue this year, and analysts expect total revenue to rise 81% to $391 billion.

Micron Technology's latest earnings report signals that the AI-driven memory shortage will persist through at least 2028, with management forecasting that AI adoption will increasingly expand beyond data centers into smartphones, PCs, automotive, industrial applications, and robotics. The company posted a 346% revenue jump and a more than tenfold increase in earnings per share, with gross margin reaching 85% and operating margin hitting 80%. CEO Sanjay Mehrotra said on-device AI combined with pent-up replacement demand will drive memory demand growth in PCs and smartphones, and noted that new agentic AI platforms will boost the value of edge devices. This outlook implies significant growth opportunities for chipmakers with heavy exposure to the device market, including Intel, AMD, Arm Holdings, and Qualcomm, as the global edge AI market is projected to grow from $30.9 billion this year to $225.5 billion in 2035.

Bernstein analyst David Dai raised the firm's price target on Arm Holdings to $500 from $300 and maintained an Outperform rating. Dai described Arm as a structural beneficiary of the renaissance of CPUs for agentic AI, citing the architecture's power efficiency. Bernstein also pointed to Arm's shift from an IP provider to a CPU maker, forecasting $22 billion in revenue by 2030 after revising its 2030 CPU total addressable market estimate to $223 billion. Earlier in June, Mizuho also raised its price target on Arm to $500 from $425, citing accelerating agentic AI tailwinds and estimating the company could generate $15 billion in agentic AI infrastructure CPU revenue by fiscal 2031.

Cerebras shares fell 11% in premarket trading after the semiconductor company reported its first earnings since going public in May, posting a first-quarter loss of 22 cents on revenues of $193.4 million and guiding for core gross margin to shrink to between 36% and 38% in the second quarter from 46.5% in the first. FedEx shed about 6.5% even after delivering better-than-expected fiscal fourth-quarter results, which were the last before it spun off its freight business. Micron rose more than 2.5%, rebounding from a 13% drop on Tuesday and ahead of its earnings due after the bell Wednesday, while other memory stocks also recovered from a sell-off triggered by a sharp decline in South Korean tech shares, with Sandisk up more than 2%, Western Digital up more than 1%, and Seagate Technology up about 1%. KB Home added 2.5% after fiscal second-quarter revenue of $1.11 billion beat the $1.10 billion consensus, though earnings of 43 cents per share missed the 45-cent estimate. Worthington Enterprises tumbled 10% after adjusted earnings of 97 cents per share on revenue of $371.5 million fell short of FactSet expectations for $1.06 per share and $386.5 million. Wendy's surged as it became one of the most discussed stocks on Reddit's r/Wallstreetbets, with short interest around 23% of its float according to S3 Partners, potentially setting up a short squeeze. Arm Holdings rose 3% after UBS and TD Cowen raised price targets, citing an improved outlook for its CPU business amid the shift toward agentic AI. Take-Two Interactive Software gained more than 3% after announcing that presales for Grand Theft Auto 6 begin Thursday and after BTIG initiated coverage with a buy rating, saying the game will drive a multi-year improvement in earnings power.