ARM Stock Just Posted Its Best Day In Over A Year — A Week After Q1 Beat: Retail Gets More Bullish

• Last week, ARM issued Q1 results and Q2 forecasts that surpassed analysts' expectations, but shares fell initially.
• CEO Rene Haas said demand for the company’s Arm AGI CPU exceeded expectations.
• ARM invested an undisclosed amount as part of the British AI startup OLIX’s $312-million series B funding.

Shares of ARM Holdings Plc surged 17.4% on Tuesday, their biggest single-day gain since April 2026, in what appeared to be a delayed rally following the chip designer’s upbeat quarterly report and optimism around a new investment in an AI startup.

The retail sentiment for ARM on Stocktwits moved higher in the ‘extremely bullish’ zone. Traders took notice of the unexpected move, but also cautioned over the stock’s higher earnings multiple.

Retail Traders Cautiously Optimistic On ARM

“$ARM falling wedge breakout on the daily on Tuesday, next resistance is $294, looks as though it’s heading there in the short-term,” a trader posted with a chart showing how the stock was breaking a bearish pattern.

“$ARM friendly reminder we are 'only' at 300 P/E at these prices!” a bearish trader remarked, referring to the trailing valuation. 

According to Koyfin, ARM traded at 117.6 times forward earnings, well above Intel’s 60.6 and Nvidia’s 21.2.

ARM Q1 Earnings Recap

The British semiconductor design company reported a $270 million profit for its fiscal first quarter, more than double the $130 million profit it earned in the corresponding quarter, according to results issued last Wednesday. Adjusted profit of $0.45 per share came in higher than $0.40 per share.

Revenue grew 22% to $1.29 billion, beating analyst estimates of $1.26 billion. Royalty revenue rose 22%, helped by more than doubling of data-center royalties, while licensing revenue increased 23%.

CEO Rene Haas said demand for the company’s Arm AGI CPU exceeded expectations, with customer demand now surpassing $2 billion across fiscal 2027 and 2028, more than double the $1 billion opportunity the company outlined last quarter. 

ARM’s second-quarter forecast was also higher than expectations. ARM stock curiously declined 6% between the earnings release and Monday.

ARM’s results and forecast were overshadowed by slowing royalty growth and a lack of longer-term update for the AGI CPU business, Morgan Stanley said in a research note last week. The firm raised its price target on ARM to $212 from $202. 

ARM’s Startup Bets

Meanwhile, ARM invested an undisclosed amount as part of the British AI startup OLIX’s $312-million series B funding, according to a statement earlier this week.

Now valued at $3.3 billion, OLIX develops AI chips designed specifically for running AI models (inference), aiming to offer a faster and cheaper alternative to Nvidia’s processors.

Arm has selectively backed deep-tech startups over the years, focusing on AI, semiconductor infrastructure and computing technologies. 

Its investments include Ampere Computing in 2019, a developer of Arm-based server processors, and Arduino in 2022, the open-source electronics platform.

In 2023, Arm invested in Oxford Ionics, a quantum computing startup; Kigen, which develops IoT security software; SiPearl, a high-performance computing chip designer; and Raspberry Pi, the maker of low-cost single-board computers.

More recently, it backed AI networking chipmaker Enfabrica in 2024, followed by Eliyan, which develops chiplet interconnect technology, and AI inference chip startup Positron AI in 2026.

ARM’s U.S. shares are up 157% year to date.

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