(CercleFinance.com) – Arm Holdings lost ground this Thursday on the New York Stock Exchange the day after the publication of quarterly results considered solid, but the presentation of annual prospects considered more cautious.
A little over an hour after Wall Street opened, the chip designer’s stock lost 1.8%, while the technology-heavy Nasdaq index advanced 0.3%.
The British group revealed on Wednesday evening an EPS excluding exceptional items (non-GAAP) of $0.36 for the last three months of its 2023-24 financial year, compared to a profit of $0.02 a year earlier.
At $928 million, revenues rose 47%, better than expected, mainly driven by 60% growth in licensing revenues amid increased corporate investment in AI. .
‘The licensing activity saved the quarter, but royalties were penalized by the industry and the networks,’ underlines a trader.
For its new financial year 2024/2025, Arm said it was targeting annual turnover ranging from 3.8 to 4.1 billion, an objective considered disappointing by some investors.
‘The median of the target range stands at 3.95 billion dollars, while the consensus was targeting four billion’, note Bank of America analysts.
‘But it is still early in the year and the management team has shown that it knows how to raise its forecasts in the past,’ underlines BofA.
The American investment bank thus maintains its purchase recommendation and its price target of $150 on the stock, which it considers to be a major beneficiary of the adoption of AI in ‘edge’ peripheral networks (smartphones , PC), or even possible market share gains in servers, to the detriment of AMD and Intel.
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