Arm shares fall nearly 4% as traders brace for upcoming earnings and AI demand outlook

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Arm drops 3.86% today to $194.67

Highlights

Arm forecasts second-quarter fiscal 2027 revenue of $1.38 billion and non-GAAP earnings per share of $0.47, matching analyst estimates.
Data center royalty revenue more than doubled year over year, supporting growth with weaker smartphone sales and ongoing AI demand monitoring.
Shares of Arm trade below key moving averages with technical indicators showing broad downside pressure and an expected range of $176.8 to $212.54 in the next five sessions.

Data center gains offset by weak smartphones as investors gauge AI demand

Arm is scheduled to report its second-quarter fiscal 2027 earnings after the U.S. market close on November 4. The company has guided for $1.38 billion in revenue and non-GAAP earnings per share of $0.47, with analyst expectations closely matching this forecast. Recent results showed data center royalties more than doubled year over year, contributing to growth alongside weaker smartphone sales, as investors continue to monitor demand for Arm's processor architecture in AI and data center markets.

Anton Kharitonov, expert at Traders Union, sees Arm’s ongoing downtrend as reinforced by both technical weakness and mixed fundamentals. He views the drop below all major moving averages as evidence of persistent selling and poor momentum. Cautious investor sentiment persists ahead of earnings as data center growth is undercut by weaker smartphone sales. Kharitonov notes that downside bias is strong with limited support above $176.8 and a high probability of further losses. He warns, "Until buyers return or the earnings surprise, I believe downside risks remain in control."

Viktoras Karapetjanc, expert at Traders Union, interprets recent price volatility as an opportunity for nimble investors. He emphasizes that Arm’s data center business is showing real progress despite headline-driven caution. The bullish MA-50 above MA-200 structure supports a constructive medium-term outlook. Karapetjanc expects upcoming earnings to highlight Arm’s AI and data center momentum, keeping the market’s attention on growth potential. He states, "Given these factors, I see further upside as likely once the market digests near-term nerves."

Sholanke Dele, market strategist, views the sustained pressure on Arm as a reflection of fragile market confidence. Dele points out that negative momentum signals and failed defenses of support deepen skepticism around a quick reversal. He notes a lack of positive fundamental catalysts in the immediate term. Dele adds, "For now, I do not see a convincing reason to expect a rapid recovery in Arm’s share price."

Sustained selling below key averages as oscillators highlight downside bias

Arm is trading below its 20-day, 50-day, and 200-day moving averages—$233.78, $257.07, and $229.87, respectively—highlighting sustained short-, medium-, and long-term pressure from sellers. Nearest resistance is seen at $196.12, with immediate support at $176.8. The broader trend confirmation remains negative, although the MA-50 is positioned above the MA-200 in a bullish alignment. Momentum indicators remain weak, as both the MACD and Average Directional Index (ADX) signal a sell setup. The Relative Strength Index (RSI) and Stochastic RSI are neutral, while the Commodity Channel Index (CCI) is in the oversold zone. Bull/Bear Power (BBP) is negative and the Awesome Oscillator (AO) also displays a negative reading. Intraday volatility is 5.00%, and sellers continue to dominate the morning session, with price trading near the day's low. Divergence between neutral oscillators and the CCI’s oversold state points to downside bias reinforced by prevailing technicals and short-term action.

Earlier, analysts noted that persistent selling pressure and negative technical signals were shaping a downside bias for Arm ahead of its earnings release. This latest analysis reinforces the prevailing bearish scenario, with short-term traders advised to monitor $176.8 as the critical support level for potential renewed downside momentum.

Source of Data: ARM Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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