Arm Holdings Stock Plummets 15%: What’s Behind the Bloodbath?
Another week, another tech stock getting mauled by the market. Arm Holdings just joined the club—shares nosedived over 15% in five brutal trading days. Was it earnings? Guidance? Or just Wall Street throwing another tantrum?
The Selloff: More Than Just a Bad Hair Day
No sugarcoating it—double-digit drops scream panic. Whether it’s weak chip demand, AI hype deflating, or hedge funds playing musical chairs with portfolios, Arm got caught in the crossfire. Remember: stocks don’t crash on ‘valuation concerns’ alone. Something’s rotten in the semiconductor aisle.
Tech Wreck or Buying Opportunity?
Every dip has its buyers. Crypto traders would’ve HODL’d through this—traditional markets? Not so much. If you believe in Arm’s long-term moat (CPU architecture = tech’s plumbing), this might be your Black Friday sale. Or… it’s the start of a ‘90s dot-com rerun. Place your bets.
Wall Street’s Two-Step: Overhype Then Abandon
Let’s be real—analysts upgraded Arm to the moon post-IPO, only to downgrade it at the first whiff of trouble. Classic ‘pump then dump’ behavior. Meanwhile, Bitcoin maximalists smirk from their decentralized bunkers. At least crypto’s volatility comes with honesty.
Top-line growth, bottom-line slide
U.K.-based Arm published its results for the first quarter of its fiscal 2026 on Wednesday. The report showed that the company managed to increase its total revenue by 12% year over year to slightly more than $1.05 billion. That was largely due to a 25% increase in royalty revenue, which landed at $585 million, and despite a 1% slump in licensing revenue to $468 million.
Image source: Getty Images.
Non-GAAP (adjusted) net income traveled in the opposite direction. It fell to $374 million, or $0.35 per share, compared with the year-ago profit of $419 million. With those numbers, Arm met the consensus analyst estimate for profitability, although it missed slightly on revenue -- pundits following the stock were expecting it to earn $1.06 billion.
More of a concern for investors was management's guidance for the company's current (second) quarter. Its forecast is for $1.01 billion to $1.11 billion in revenue, which, if achieved, WOULD be down or, at best, essentially flat over the first quarter. Meanwhile, adjusted earnings were forecast at $0.29 to $0.37.
Bearish analyst moves
Although analyst reactions to the quarter were mixed, enough pundits trimmed their price targets to affect sentiment on the stock. 's Timothy Arcuri, for one, shaved his fair value assessment to $175 per Arm share from his preceding $185. He did, however, maintain his buy recommendation. Lee Simpson ofacted similarly, reducing the price target to $180 per share from $194 while keeping an overweight (buy, in other words) rating intact.
