Arm Holdings plc. ADR (ARM)

Arm Holdings Inc ADR (ARM) stock plummeted by 16.90% due to a scare from Super Micro Computer, which sent the AI sector spiraling. This decline marks the third consecutive day of losses for Arm Holdings, as disappointing news rattles the artificial intelligence (AI) front.

• Super Micro Computer's Impact: After ASML and Taiwan Semiconductor Manufacturing reported earnings that fell short, impacting Arm and other AI stocks, Super Micro Computer (SMCI) shares plunged further. One analyst noted the company's failure to pre-report revenue, a departure from its previous patterns, contributing to the negative sentiment.
• Broader Sector Implications: The recent decline in AI-related stocks, including Arm Holdings, raises questions about the sustainability of the AI bubble. While there is no clear indication of a slowdown in AI momentum, other factors such as weak demand for consumer devices like smartphones and PCs are affecting these stocks.
• Arm's Financial Standing: Arm stock is now down nearly 50% from its peak in February, partly due to its high price-to-sales ratio, which was around 50 at one point. Despite its profitability, the stock is considered expensive on a forward price-to-earnings (P/E) basis, currently standing at around 75. However, the company's competitive advantages and accelerating revenue growth from AI-related demand offer some optimism.
• Future Outlook: While this week has been challenging for Arm shareholders and the AI sector, there is no material reason to sell based solely on the recent pullback. Earnings reports from key players like Super Micro and Arm, scheduled for April 30 and May respectively, will provide further insights into the sector's trajectory.

Arm Holdings Plc. ADR (ARM) stock dropped by 8.28% due to a broader sell-off in the tech sector and concerns surrounding ongoing geopolitical issues within the semiconductor industry. In December, Advanced Micro Devices (AMD), under the leadership of CEO Dr. Lisa Su, unveiled its new MI300x AI accelerator, positioning itself to compete with Nvidia (NVDA) in the data center sector. This development garnered significant attention, and investors were optimistic about AMD's prospects in the AI market. During the event, AMD updated its forecast for the AI accelerator market, projecting that the total addressable market would reach $400 billion by 2027, a substantial increase from the $150 billion estimated in August of the same year.

• Semiconductor Industry Sell-Off: The declines in the stock prices of Arm and AMD were part of a broader trend affecting semiconductor stocks on that specific day. ASML (ASML) disclosed that the Dutch government had recently partially revoked export licenses for certain lithography systems destined for China. This announcement further exacerbated concerns in the semiconductor sector.
• Chinese Response to Export License Revocation: China's foreign ministry spokesman, Wang Wenbin, responded to this development, urging the European country to adopt an impartial stance, respect market principles and legal frameworks, and take practical actions to protect the mutual interests of both nations and their respective companies. Wang Wenbin also emphasized the importance of maintaining the stability of international supply chains in the semiconductor industry. These events collectively highlight the vulnerability of tech stocks, particularly those in the semiconductor sector, to geopolitical tensions and broader market dynamics. Investors and industry participants are closely monitoring these factors as they navigate the uncertain landscape of the semiconductor industry.

Arm Holdings Ltd Stock (ARM) dropped by 5.18% from $54.40 to $51.58 in the trading on Thursday November 9, 2023. The reason why ARM stock down today is due to a disappointing forecast. It was attributed to uncertainties surrounding the precise timing of certain deals and potential changes in the revenue recognition profiles for forthcoming agreements, while the trajectory of the semiconductor market recovery is not clear amid vulnerable current macroeconomic challenges.

• Q3 revenue is projected in the range of $720M to $800M, vs. the consensus of $772.11M
• Non-GAAP EPS is expected to be between $0.21 and $0.28, compared to the consensus of $0.27
• FY2024 outlook: Revenue is anticipated to fall within the range of $2.96B to $3.08B, vs. the consensus estimate of $2.96B, and non-GAAP EPS is projected to be between $1.00 and $1.10, vs. the $1 consensus.

Arm Holdings Ltd Stock (ARM) dropped by 5.18% from $54.68 to $51.85 in the trading on Thursday October 12, 2023. The reason why ARM stock down today is due to Senior Staff Departure: Senior Arm China staff quit to create government-backed startup. The departures included the head of R&D, a regional head of sales and a government relations employee.