Arm Holdings shares drop about 10.5% after upbeat earnings are overshadowed by weak guidance

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Arm slides 10.41% today to $172.02

Highlights

Arm Holdings posted record Q2 revenue of $1.44 billion, up 27% year over year, led by licensing growth and data center royalties.
Management identified over $2 billion in anticipated demand for AI, data center, and AGI CPU offerings through fiscal 2028.
Shares of Arm Holdings trade near $172.02 and remain under heavy bearish pressure, with key support at $162.45 and resistance at $194.09.

Mixed sentiment as AI-driven gains offset by royalty miss and tepid outlook

Arm Holdings reported record second-quarter revenue of $1.44 billion for fiscal 2027, up 27% year-over-year, driven by a 50% increase in license and other revenue and growth in data center royalties. The company emphasized strong demand for AI and data center applications, as well as its upcoming AGI CPU, with management identifying over $2 billion in anticipated demand through fiscal 2028. Nonetheless, the quarter's royalty revenue came in below some analyst forecasts and Q3 guidance was only marginally above Wall Street estimates, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees significant downside risk for Arm Holdings. He highlights that even record revenue and solid earnings failed to support price action. Technicals are distinctly bearish, with the stock unable to reclaim any key averages and indicators solidly in negative territory. Subdued royalty revenue and only marginal Q3 guidance improvements raise doubts on growth momentum. He cautions, "This selling pressure points to deep skepticism — I would avoid bottom-fishing here until technicals improve and fundamentals show real upside."

Viktoras Karapetjanc, expert at Traders Union, believes the long-term growth story remains attractive for Arm Holdings. He notes robust revenue gains, strong licensing activity, and accelerating demand for AI and data center products. Despite the short-term dip, Karapetjanc sees this phase as an opportunity for constructive accumulation. He emphasizes, "The bullish structure remains intact — this market offers multiple setups for those focused on future earnings power and tech leadership."

Jainam Mehta, market strategist, points out that Arm Holdings trades within a volatile range defined by $162.45 and $194.09. He notes momentum remains negative, but oversold signals may trigger contrarian interest if price stabilizes near support. Mehta adds that cautious traders should wait for a break in either direction before entering new positions. He states, "The key now is patience — let price action confirm whether support holds or further downside develops."

Bearish bias persists as multiple technical levels signal selling pressure

Arm Holdings is trading below the 20-day ($228.64), 50-day ($256.07), and 200-day ($230.29) moving averages, reflecting persistent bearish momentum across short-, medium-, and long-term trends. The stock faces resistance at $190.11 and has support at $162.45, with distant averages and the Ichimoku Kijun ($254.01) reinforcing a negative bias. Momentum indicators, including MACD and ADX, remain in sell mode. The RSI is neutral, while both Stochastic RSI and CCI are in the oversold zone, indicating possible seller fatigue but not a confirmed reversal. Bull/Bear Power (BBP) is negative, and the daily Awesome Oscillator continues to show a bearish tone. Price action remains close to the session's lows, with hefty intraday volatility at 10.07%.

Previously it was reported that Arm Holdings faced persistent selling pressure following strong earnings, with technical indicators signaling a prevailing bearish trend. The current analysis reinforces this outlook, highlighting a high likelihood of continued downside as the stock consolidates below resistance at $194.09 and traders monitor for a potential breakdown beneath $162.45.

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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