Investors focus on potential chip shortages for Arm’s new AI designs, overshadowing better-than-expected quarterly results.
Arm Holdings shares turned lower after initially rising, as supply chain worries for its next-generation AI chips offset a robust earnings report. The company posted revenue and profit figures above analyst estimates, driven by strong demand for its semiconductor designs in data centers and smartphones.
Prior to the report, consensus forecasts had called for modest growth, but Arm’s guidance for the current quarter fell short of some expectations. The stock had surged over 50% year-to-date before today’s reversal, reflecting high investor expectations for AI-related growth.
Traders cited concerns that foundry capacity constraints could delay production of Arm’s latest chip architectures, particularly for high-performance AI applications. The stock closed down 3.2% after earlier gaining as much as 4%.