Arm Shares Drop After Earnings Announcement, Highlighting High Expectations for AI Companies
Optimistic results were not enough to boost Arm Holdings' stock price on Wednesday, indicating that investors are taking a more critical view of artificial intelligence (AI) companies in today's tech stock trading. The UK-based chip design company reported third-quarter revenue of $1.24 billion, a 26% year-over-year increase and slightly above analysts' expectations of $1.23 billion. Adjusted earnings per share were 43 cents, higher than the FactSet average estimate of 41 cents. Arm's midpoint for first-quarter revenue guidance was $1.47 billion, while FactSet's average estimate was $1.44 billion. However, investors may have been looking for a more significant beat, especially as people are becoming more selective with AI-related trades. Before the earnings report, Bank of America analyst Vivek Arya noted that there had been "indiscriminate" sell-offs in chip stocks recently. Arm's shares fell 9% in after-hours trading on Wednesday.
Editor: Wang Yongsheng
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The 5% U.S. Treasury yield storm is coming! The refinancing time bomb countdown begins—who will be the first victim?
The 10-year US Treasury yield has surpassed 5%, reaching a new high since 2007. The longer high interest rates persist, the greater the refinancing pressure will be on real estate companies, commercial real estate, and highly indebted firms, with systemic risks likely to accelerate and emerge within the next 12 to 18 months.
Don't Fight the Profit Cycle! Will U.S. Stocks Break 8,000 Points This Year?
Jefferies predicts that, driven by the dual engines of the AI investment boom and stronger-than-expected corporate earnings, the S&P 500 index is expected to soar to 8,000 points by the end of 2026 and further reach 9,000 points in 2027. AI-driven profit expansion has spread from the "Magnificent Seven" to the entire market, with the S&P 500's EPS forecast to surge by 35% this year, far exceeding market consensus—marking the strongest earnings supercycle since 1995! The only real threat: if US Treasury yields continue to spike, the risk of valuation compression cannot be ignored.
Will “continual learning” AI extend the memory “shortage” until 2031?
Citi believes that as AI enters the era of "continuous learning" beyond simple training and inference stages, demand for HBM, server DDR5, and enterprise SSDs (eSSD) will experience explosive and simultaneous growth starting from 2027. While demand will surge rapidly, the supply side is constrained by HBM production capacity usage and slower technology migration, leading to expansion lagging far behind demand. This supply-demand imbalance is expected to continue until 2031.
Crypto prices
More
