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Arm Holdings (ARM) is a British semiconductor and software design company renowned for its innovative microprocessor technology, powering billions of devices worldwide. The company specializes in designing energy-efficient processor architectures and intellectual property (IP) solutions used in mobile devices, automotive systems, IoT, and AI applications. Arm's technology underpins many of the world's leading semiconductor chips used in smartphones, tablets, and a growing range of connected devices.
Founded in 1990, Arm Holdings is headquartered in Cambridge, United Kingdom, with operations spread globally.
About ARM Stock
ARM stock is showing a five-day decrease of approximately 9%. Over the last month, the stock has declined 18%, while the six-month performance is just slightly up at around 3%. The stock is green on the year-to-date (YTD) timeframe as it gains 10%, while its 52-week performance stands at a 2% gain.
Compared to the broader Nasdaq Composite Index ($NASX), which has exhibited more significant volatility and lower overall gains, Arm has demonstrated moderate stability. The Nasdaq Composite is down 4% in the last five days and about flat in the one-month period. The index has been in the green over the past six months, gaining 17% and approaching 19% over a 52-week period.
Arm’s Solid Q2 Results
Arm Holdings reported its Q2 FY2026 results on Nov. 5, delivering revenue of $1.14 billion, a 34% year-over-year (YoY) increase and well above analyst expectations. Adjusted earnings per share came in at $0.30, also beating consensus estimates. Royalty revenue rose 21% to $620 million, driven by the broader adoption of Armv9 and Compute Subsystems and strong demand in AI and data center markets.
The company’s operating income reached $326 million, representing a healthy 38.6% operating margin. Arm maintained strong free cash flow, bolstered by a growing base of high-value license agreements and an expanding royalty pool. Arm’s developer ecosystem now exceeds 22 million, amplifying ecosystem strength. Operational highlights included the launch of the Lumex CSS smartphone platform and increased penetration in AI data centers, with nearly 50% of top hyperscaler CPUs now Arm-powered. The company also entered new licensing partnerships across smartphones, tablets, and cloud customers, reinforcing its diversified growth.
Arm Holdings provided strong guidance for Q3 FY2026, projecting revenue between $1.17 billion and $1.2 billion, representing continued sequential growth driven by rising AI and cloud demand. The company expects earnings per share to range from $0.31 to $0.33, slightly ahead of analyst expectations, reflecting the company’s confidence in expanding licenses, royalty fees, and more.
Arms Extend Partnership with Nvidia
Arm has expanded its partnership with Nvidia (NVDA) to integrate Nvidia’s NVLink Fusion ecosystem into Arm’s Neoverse platform, designed for high-performance, energy-efficient scaling in AI data centers. This integration allows ecosystem partners to connect Arm-based CPUs with Nvidia GPUs through a coherent, high-bandwidth interface, enhancing AI infrastructure performance and flexibility.
The Arm Neoverse platform is already deployed in over one billion cores and is used by major hyperscalers, including Amazon (AMZN) Web Services, Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Oracle (ORCL), and Meta (META). It is forecasted to capture 50% of the market share among top hyperscalers by year-end 2025. Projects like the $500 billion Stargate AI data center also leverage Arm-based compute.
Arm CEO Rene Haas highlighted that this collaboration sets a new AI infrastructure standard with Grace Blackwell-class performance extended across the ecosystem, while Nvidia CEO Jensen Huang described NVLink Fusion as the connective fabric of the AI era. This partnership enables quicker integration, faster time to market, enhanced bandwidth, and energy efficiency for custom AI infrastructure, positioning both firms at the forefront of AI accelerator innovation.
This deal follows Nvidia's similar high-profile partnership with Intel to integrate NVLink into x86 architectures, signaling Nvidia's growing role as a foundational AI connectivity platform provider.
Analyst Rating on ARM Stock
ARM stock has a positive sentiment among market experts with a consensus “Moderate Buy” rating and a mean price target of $173.84, reflecting an upside potential of 27% from the market rate.
The stock has been rated by 29 analysts in total, receiving 19 “Strong Buy” ratings and 10 “Hold” ratings.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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