Arm Holdings Sinks on Soft Q1 Outlook and Rising Costs

Nauman khan

Thu, May 8, 2025, 7:36 AM 1 min read

Arm Holdings (NASDAQ:ARM) shares fell much than 8% successful premarket trading connected Thursday after the spot decorator issued a softer-than-expected fiscal 2026 first-quarter outlook.

Morgan Stanley expert Lee Simpson, who has an Overweight standing and a $150 terms target, noted that portion the company's fiscal fourth-quarter results were solid, a crisp emergence successful operating expenses could measurement connected near-term profitability. Arm's adjusted operating borderline for the 4th came successful astatine 52.8%, supra the 50% midpoint of its income guidance, contempt a 11% year-over-year summation successful operating expenses to $566 million.

• Warning! GuruFocus has detected 2 Warning Sign with ARM.

Looking ahead, Arm guided for $625 cardinal successful Q1 operating expenses, indicating continued concern successful its engineering basal amid broader request expectations, Simpson said.

J.P. Morgan expert Harlan Sur trimmed his terms people to $140 from $175, citing imaginable risks from cardinal customers similar Nvidia (NASDAQ:NVDA) moving to customized cores, which could interaction Arm's royalty revenues.

Other firms, including Wells Fargo, HSBC, TD Cowen, KeyBanc, Rosenblatt, and Raymond James, besides chopped their terms targets pursuing the guidance.

Based connected the 1 twelvemonth terms targets offered by 30 analysts, the mean people terms for ARM Holdings PLC is $139.31 with a precocious estimation of $202.00 and a debased estimation of $75.34. The mean people implies a upside of +12.18% from the existent terms of $124.19. For deeper insights, sojourn the Arm Holding Forecast page.

This nonfiction archetypal appeared connected GuruFocus.