Chip developer Arm Holdings last Wednesday, November 6, released a forecast for its revenue in line with Wall Street targets, against which the value of the brand’s shares fell by 4.5%.
According to media reports, some analysts explain the depreciation of the securities of the mentioned developer of microcircuits by unfulfilled hopes of investors for stronger growth based on artificial intelligence.
Arm’s market capitalization has reached around $144 billion. This indicator has become a reality for the chip developer largely due to expectations. In the relevant context, bets are implied that the brand licensing its products will be the beneficiary of a sharp increase in artificial intelligence computing. The initial public offering (IPO) of Arm shares took place in September last year.
The revenue forecast released this week by the chip developer failed to live up to expectations set by companies like AMD and Nvidia that directly design artificial intelligence chips.
It can be assumed that the current Arm problem lies in the fact that the brand was able to successfully gain attention in the context of the main tendencies in the AI area, but within the framework of expectations, and not materialized objectively existing results. In this case, first of all, it implies a growing demand for artificial intelligence chips. At the same time, it turned out that the full implementation of Arm-related expectations is not guaranteed.
The chip developer predicts that its revenue for the current third quarter of fiscal year 2025 will range from $920 million to $970 million. In this case, the average indicator is $945 million. The LSEG forecast called for an average figure of $944.3 million.
Arm also expects earnings of between 32 cents and 36 cents per share in the third fiscal quarter. Analysts interviewed by the media predicted a third-quarter profit of 34 cents a share.
The chip developer’s revenue for the second quarter of fiscal year 2025 was fixed at $844 million. This indicator showed an increase of 5% year-on-year.
As we have reported earlier, Super Micro Shares Demonstrate Decline.
