ARM (NASDAQ:ARM) Shares Down 1.5% – Should You Sell?

Arm Holdings PLC Sponsored ADR (NASDAQ:ARM)’s stock price fell 1.5% on Monday. The company traded as low as $299.80 and last traded at $302.90. 2,880,113 shares were traded during mid-day trading, a decline of 63% from the average session volume of 7,714,879 shares. The stock had previously closed at $307.49.

Key Headlines Impacting ARM

Here are the key news stories impacting ARM this week:

• Positive Sentiment: Arm’s exposure to AI and data-center infrastructure remains a key growth catalyst. Analysts have highlighted the shift toward agentic AI as a potential driver of increased demand for Arm-based computing and have argued that selling its own data-center CPUs could allow Arm to capture more revenue per system. Agentic AI Shift Provides a Catalyst for Growth
• Neutral Sentiment: Arm will report second-quarter fiscal 2027 results after the market closes on November 4, followed by a conference call covering results and its business outlook. The announcement gives investors a near-term catalyst to assess licensing momentum, AI demand and guidance. Arm Announces Earnings Release Date
• Negative Sentiment: Arm and Qualcomm have begun a Delaware federal-court trial over a licensing dispute. Qualcomm alleges that Arm withheld chip-testing tools required under their agreement and improperly disclosed a termination threat connected to a potential Meta deal. Qualcomm is seeking relief that could affect billions of dollars in future royalty payments, creating material legal and revenue risk for Arm. Qualcomm and Arm Begin New Trial
• Negative Sentiment: After an approximately 187% year-to-date advance, Arm’s valuation leaves less room for disappointing news. A beta near 3.9 indicates unusually high sensitivity to market volatility, while the cited Wall Street price target of about $289 is below recent trading levels. The Highest-Beta Name in Big Tech Just Ran

Analysts Set New Price Targets

ARM has been the topic of several analyst reports. HSBC downgraded ARM from a “buy” rating to a “hold” rating and increased their price target for the stock from $255.00 to $315.00 in a research report on Tuesday, July 14th. Piper Sandler assumed coverage on ARM in a report on Wednesday, September 9th. They issued an “overweight” rating and a $320.00 price target for the company. Wells Fargo & Company lowered their price objective on ARM from $350.00 to $280.00 and set an “overweight” rating on the stock in a research report on Thursday, July 30th. Morgan Stanley raised their price objective on shares of ARM from $202.00 to $212.00 and gave the stock an “equal weight” rating in a research note on Thursday, July 30th. Finally, KeyCorp lifted their target price on shares of ARM from $300.00 to $430.00 and gave the company an “overweight” rating in a report on Tuesday, July 14th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus price target of $303.32.

ARM Stock Performance

The stock has a market cap of $323.52 billion, a PE ratio of 312.27, a price-to-earnings-growth ratio of 9.12 and a beta of 3.78. The company has a 50 day moving average of $265.65 and a two-hundred day moving average of $261.24.

ARM (NASDAQ:ARM) last issued its quarterly earnings results on Thursday, July 30th. The company reported $0.45 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.40 by $0.05. ARM had a return on equity of 12.24% and a net margin of 20.25%.The company had revenue of $1.29 billion for the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter in the prior year, the business posted $0.35 earnings per share. ARM’s revenue for the quarter was up 22.4% on a year-over-year basis. As a group, equities research analysts anticipate that Arm Holdings PLC Sponsored ADR will post 1.15 EPS for the current year.

Insider Activity

In related news, CFO Jason Child sold 10,400 shares of ARM stock in a transaction on Monday, September 21st. The shares were sold at an average price of $300.00, for a total value of $3,120,000.00. Following the sale, the chief financial officer owned 153,442 shares of the company’s stock, valued at approximately $46,032,600. This trade represents a 6.35% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Hedge Funds Weigh In On ARM

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Syntax Research Inc. acquired a new stake in shares of ARM in the first quarter valued at about $30,000. Evelyn Partners Investment Management Services Ltd acquired a new position in shares of ARM during the 1st quarter worth about $30,000. Motiv8 Investments LLC purchased a new position in ARM in the 4th quarter valued at about $38,000. Cassaday & Co Wealth Management LLC purchased a new position in ARM in the 1st quarter valued at about $40,000. Finally, Sterling Capital Management LLC boosted its holdings in ARM by 1,400.0% in the 1st quarter. Sterling Capital Management LLC now owns 375 shares of the company’s stock worth $57,000 after buying an additional 350 shares during the last quarter. 7.53% of the stock is owned by hedge funds and other institutional investors.

About ARM

Arm Holdings plc (NASDAQ: ARM) is a semiconductor and software design company that develops intellectual property used to create energy-efficient computing products. Arm does not generally manufacture chips; instead, it licenses processor architectures, CPU cores, graphics technologies and related system IP to semiconductor companies and original equipment manufacturers, which incorporate them into their own products.

The company’s offerings include the Cortex family of CPUs for mobile, consumer, automotive and embedded applications; Neoverse platforms for cloud and data-center infrastructure; Mali graphics processing units; and Ethos neural processing units designed for artificial intelligence and machine-learning workloads.