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Arm Beats Q4 Forecast, Warns Smartphone Decline Amid Chip Shortage

5/8/2026

34 4 Full Breakdown

Summary

Arm Beats Forecasts

Arm posted fiscal Q4 revenue of $1.49 billion and EPS of $0.60, beating estimates.
CEO Rene Haas said demand for AGI CPU topped $2 billion in six weeks but supply covers only $1 billion, prompting shares to rise 12% then fall 7.25% to $220.10 on May 7, 2026.
Haas warned smartphone unit growth will turn negative because of a memory-chip shortage, guiding Arm to forecast Q1 2027 revenue of $1.26 billion and EPS of $0.40, above estimates.

Summary

Arm Secures Partnerships

Arm secured a long-term AI technology partnership with the Indonesian government, extending its ecosystem into Southeast Asia.
AWS reported that its custom silicon business, including Arm-based Graviton, generates over $20 billion annually and expands at triple-digit growth.
SAP will shift core database and business-application workloads to Arm, starting with Graviton and later moving to internal Arm AGI CPUs.

Summary

Arm Beats Outlook

Arm forecast first-quarter revenue of $1.26 billion and adjusted earnings of $0.40 per share, a modest beat of analyst expectations.
The company generates licensing revenue by selling chip designs to major technology firms such as Nvidia and Apple.
Arm’s business model blends upfront licensing fees with ongoing royalty payments for every product that incorporates its designs.

Summary

Arm Target Boost

Wells Fargo raised Arm's price target to $220 from $175 and kept Overweight rating.
Short interest is 11.7% while MACD is above signal line, indicating momentum.
RSI reads 63.94, accompanied by a golden cross that appeared in April.
Arm joined the Open Compute Project forum to release AGI CPU server designs while stock trades at top of its 52-week range with resistance $237.50, support $188.53, and a 90% YTD gain.

History

Historical Context

SoftBank bought British chip designer Arm for about $32 billion in July 2016, making it the largest European tech takeover. After the failed $40 billion Nvidia merger in February 2022, Arm went public on Nasdaq in September 2023, raising $4.87 billion. The 2025 AI-focused revenue surge builds on that ownership and IPO foundation, driving double-digit growth expectations.

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Arm Beats Forecasts

Arm posted fiscal Q4 revenue of $1.49 billion and EPS of $0.60, beating estimates.
CEO Rene Haas said demand for AGI CPU topped $2 billion in six weeks but supply covers only $1 billion, prompting shares to rise 12% then fall 7.25% to $220.10 on May 7, 2026.
Haas warned smartphone unit growth will turn negative because of a memory-chip shortage, guiding Arm to forecast Q1 2027 revenue of $1.26 billion and EPS of $0.40, above estimates.

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