Arm Holdings' Q2 Earnings Call Centers on AGI CPU Expansion

Arm Holdings (NASDAQ:ARM) reported Q2 revenue of $1.44B (+27% YoY) and EPS of $0.52, beating estimates. Despite strong guidance, shares fell 11.7% due to weak royalty revenue growth and broader tech sector declines. Barclays cut its price target to $325, while Goldman Sachs maintained a sell rating with a $160 target.

Piper Sandler kept ARM Holdings at Overweight but cut its price target to $270 from $320, a 15.6% reduction. The new target suggests a 40.8% upside from the Nov 4 close of $191.80, according to the firm.

Semiconductor stocks fell sharply, with the PHLX Semiconductor Index (SOX) down 8.05%. Despite the decline, the index is up 33% year-to-date. AMD, Arm, onsemi, Seagate, and Tower Semiconductor reported strong earnings growth, driven by data center demand. AMD's revenue rose 45% YoY, while Arm's revenue increased 27% YoY. All five companies' shares were down as of 10:18 a.m. ET.

Memory chip stocks fell sharply, led by SanDisk's 18% drop, following U.S. election results and Qualcomm's weak handset sales. Micron, SK hynix, Seagate, and Western Digital also declined. Qualcomm's earnings beat estimates but missed on revenue. Analysts are divided on the sector's outlook, with some predicting further declines and others seeing a buying opportunity.

Arm Holdings' stock fell 12% despite a 27% revenue increase to $1.44B, as weak smartphone royalties concerned investors. Royalty revenue rose 8% to $670M, below estimates. Analysts noted growth in data centre royalties and AGI CPUs, with mixed price target adjustments.

Arm Holdings (ARM) reported Q2 earnings of 52 cents per share on $1.44B revenue, beating estimates. Shares fell 7% as royalty revenue grew only 8% to $670M, missing expectations due to smartphone production challenges. Data center royalties doubled, showing demand outside mobile devices.