Arm Chip Stock Dips Amid AI Boom, Investors Unimpressed with Revenue Guidance

Diving into the Numbers

Woo oo! Arm chip stock closed down more than 2% as lackluster revenue guidance overshadowed their positive sales quarter. Revenue soared 47% to $928 million with the licensing business growing 60% and royalty revenue up 37%.

Guidance Troubles

Oh boy! Arm's revenue expectations for 2025 left investors quacking in disappointment. Analysts were expecting more duck bills in the bank but Arm forecasted revenue between $3.8 billion and $4.1 billion slightly lower than estimates.

Analysts' Take

"Hot dog!" Citit analysts praised Arm's licensing business strength but emphasized the need for licensing upside to boost future royalty growth. Looks like Arm needs to spread its wings and fly higher!

What is Arm?

"Well blow me down!" Arm is like the "Switzerland" of chip design sitting pretty and neutral while other chipmakers do the heavy lifting. Founded in jolly old England Arm licenses out its chip designs for a pretty penny. Beautiful chaos!

Nvidia Deal Drama

"Oh phooey!" When's Arm's not causing a commotion in the chip world? SoftBank swooped in for a $32 billion buyout then Nvidia tried to snatch it for $40 billion but it all went sideways due to regulatory tussles. What a merry go round!

Stock Market Soars

"Oh brother!" Since hitting the Nasdaq Arm's stock has been on a rollercoaster ride driven by the AI frenzy. Shares have more than doubled from the IPO price thanks to the hunger for chips that can run super duper generative AI apps.