Arm Holdings Faces Pullback Amid Mixed Stargate Reception

Arm Holdings sees a 7.7% decline as doubts over its role in the Stargate AI project surface. Investors react negatively following disappointing earnings from SK Hynix, driving chip stocks lower.

Date: 23-01-2025

AI Rating: 7

Earnings Per Share (EPS): Arm is projected to see an increase in adjusted earnings per share from $0.29 to $0.34. This anticipated rise suggests a positive outlook for the company's profitability moving forward.

Revenue Growth: Revenue is expected to increase by 15% to $947.2 million. This growth rate indicates a solid demand for Arm's products, which may contribute to maintaining investor confidence.

The overall situation reflects a mixed sentiment towards Arm Holdings. Despite a strong initial reaction to the Stargate project, doubts raised regarding the funding and the extent of Arm's involvement have negatively impacted its stock.

Investors are closely monitoring developments around the Stargate project and its implications for Arm, especially given that Softbank’s financial strategies will directly influence Arm's market performance. There is consensus that a successful outcome would be beneficial, yet concerns about potential dilution of shares if Softbank sells part of its stake may linger, weighing on investor sentiment.

It remains to be seen how Arm's imminent fiscal third-quarter earnings report on February 5 will reflect on its future stock price.

Stocks: ARM NVDA