Arm stock slips after hours as lack of blowout guidance offsets quarterly results Anuron Mitra Wed, November 4, 2026 at 4:32 PM EST 3 min read MSFT +6.47% GOOG +4.16% META +1.62% QCOM -2.27% AAPL +5.48% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Investing.com -- Arm on Wednesday delivered a quarterly top- and bottom-line beat, but its current quarter profit and revenue guidance failed to comfortably beat expectations.
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U.S.-listed shares of the British chip designer fell nearly 4% after hours.
Arm is a well-known player in the semiconductor market, with its chip designs being used by companies such as Qualcomm, Apple, and Samsung Electronics in graphics processing units (GPUs) in smartphones, and by cloud computing giants and hyperscalers such as Amazon, Microsoft, Alphabet, and Meta Platforms.
ARM brings in revenue from licensing its technology to these companies and then charging a royalty fee for each product that uses its design.
The British chip designer's technology is used in developing artificial intelligence-focused server chips. The firm earlier this year also said it was expanding its strategy beyond offering intellectual property and compute subsystems to producing silicon products. This included the launch of a new central processing unit (CPU) designed for AI data centers, called Arm AGI CPU.
"AI is driving unprecedented demand for compute across the cloud, devices and autonomous systems, with Arm being the compute platform of choice. Our business is now driven by two areas, both of which are showing rapid growth: The IP business, where partners increase their investment in Arm technology and deploy record numbers of Arm-based silicon, and our new silicon business, where demand for Arm AGI CPU is extremely strong," ARM top boss Rene Haas and finance chief Jason Child said in a letter to shareholders.
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The Cambridge, England-based company's results come at a time when the broader AI trade on Wall Street has been under pressure. Concerns have soared about the massive amounts of debt being issued by companies to fund their AI infrastructure buildouts and whether such spending will ultimately be rewarded with comparable returns.
Chip stocks in particular have been some of the hardest hit by the downturn in sentiment around AI. The Philadelphia Semiconductor Index - a key barometer of chip stocks - slumped 15.4% in October. Meanwhile, U.S.-listed shares of Arm tumbled nearly 29% last month.
Against this backdrop, investors have been closely watching quarterly results from chipmakers and chip designers to gauge the demand for AI chips and whether that demand was strong enough to warrant the unprecedented spending on AI.
"Arm continues to gain share across the data center, driven by growing demand for performance and power efficiency as AI infrastructure scales. Data center royalties doubled year over year, and Arm-based server market share at the top hyperscalers more than tripled—from 15% in calendar 2024 to more than 50% in calendar 2025," the company's top executives said in the letter to shareholders.
"Based on current ramps across Google Axion, AWS Graviton, Microsoft Cobalt, and NVIDIA platforms, we expect that share to exceed 60% by the end of calendar 2026," they added.
Arm said it earned 52 cents per share on an adjusted basis on revenue of $1.44 billion for its fiscal Q2 2027. Analysts had expected an adjusted profit of 47 cents per share on revenue of $1.38 billion.
For its fiscal Q3 2027, ARM sees adjusted profit per share of 56 cents plus/minus 4 cents on revenue of $1.54 billion plus/minus $50 million. The consensus estimates had been for a profit of 55 cents per share on revenue of $1.53 billion.
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