ARM: Arm Stock Craters 9% as Investors Shrug Off Solid Earnings for Weak Guidance

Chip design company did good, but not great. Earnings and guidance weren’t enough to convince investors to buy up the stock.

• Arm Holdings stock ARM cratered 9% in off-market hours Wednesday after the chip designer posted earnings that didn’t sit well with investors. The company’s results for the fiscal fourth quarter ended March showed revenue of $928 million, up 21% from a year ago. The figure lifted annual revenue to a record of over $3.2 billion. But investors weren’t convinced.
• The SoftBank-backed firm, which was among the few windfall bets of tech investor Masayoshi Son, projected revenues of between $3.8 billion and $4.1 billion for the fiscal year ending March 2025. Wall Street, however, had been eyeballing revenues of $4.1 billion. After all, Arm is one of the biggest beneficiaries of the AI bonanza and has enjoyed tremendous share-price growth since its September listing on the Nasdaq.
• Shares of Arm are up about 50% on the year, boasting a market capitalization of $109 billion. The implied drop at today’s opening bell will strip that figure down to about $99 billion. With that said, the stock is drifting further away from its record high near $150 a share with about one-third of its record valuation erased.