Arm Stock Falls Over 10% Amid AI Slowdown Debate
Shares of Arm Holdings (NASDAQ: ARM) dropped nearly 10% on Monday, with the stock now trading around $239 — more than 40% below its 52-week high. The decline followed a call from Anthropic CEO Dario Amodei and others in the AI industry to slow down advancements in frontier models. Despite this sell-off, Arm's financial performance remains strong. In fiscal Q1 2027 (ended June 30), revenue rose 22% year-over-year to $1.29 billion, with royalty income growing by 22%. The company’s business model is based on licensing fees and royalties from chipmakers using its designs — not directly tied to AI development timelines. However, the slowdown in smartphone sales due to higher memory prices has impacted Arm's royalty growth expectations for fiscal 2027. CFO Jason Child noted that full-year royalty revenue growth may now be closer to high teens instead of the previously expected low- to mid-twenties.
Tickers: $ARM
Topics: AI Earnings Market Sentiment Royalties Semiconductors