Arm Holdings Faces Investor Backlash

Arm Holdings experienced a significant drop of over 11% in its stock value this Thursday. The decline followed the announcement of second-quarter guidance that fell short of Wall Street's expectations. Additionally, the company reported a decrease in net income for the first quarter of 2026, from $223 million to $130 million compared to the previous year.

Strategic Shift Raises Concerns

The semiconductor company's decision to invest in its own chip development has left investors wary, as this move is expected to reduce future revenues. Arm Holdings forecasts second-quarter earnings between $0.29 and $0.37 per share, notably lower than the $0.35 analysts had anticipated.

Market Reaction: By 10:11 am ET, shares of Arm Holdings were down 11.42%, trading at $145.20.