Latest update
$262
Updated: Jul 16, 2026, 8:52 PM UTC
Browsing public data
Arm Holdings plc, a leading designer of CPU intellectual property, reported strong performance in Q1 2026 with revenue growing 20.0% quarter-over-quarter and 20.1% year-over-year to $1.5 billion. Net income saw even more robust growth, up 40.4% QoQ and 49.0% YoY to $313 million. Despite this growth, Free Cash Flow experienced a slight decline both QoQ (-6.1%) and YoY (-5.6%) to $170 million. The company maintains excellent profitability with a gross margin of 97.5%, operating margin of 29.5%, and profit margin of 18.4%. Financially, Arm exhibits a strong balance sheet with light debt, robust debt service capabilities (EBITDA of $1.06B, Op cash of $1.52B, current ratio of 6.0), and a stable share count. Valuation remains high with a TTM P/E of 304.7x and NTM P/E of 85.1x, reflecting anticipated future growth.
Revenue
The total dollars the company billed customers. When this number grows quarter after quarter, the business is finding more demand.
Latest
↑$1.5B
Q1 2026
The most recent reported figure, in the company's own currency and reporting cadence.
QoQ
↑+20.0%
vs Q4 2025
How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.
YoY
↑+20.1%
vs Q1 2025
How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.
CAGR
•—
insufficient history
The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.
Net income
What's left from revenue after paying every cost — employees, materials, taxes, interest. Sometimes called profit or 'the bottom line.'
Latest
↑$313M
Q1 2026
The most recent reported figure, in the company's own currency and reporting cadence.
QoQ
↑+40.4%
vs Q4 2025
How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.
YoY
↑+49.0%
vs Q1 2025
How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.
CAGR
•—
insufficient history
The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.
Free cash flow
The cash actually left in the bank after the company has paid for everything and reinvested in itself. Harder to fake than net income.
Latest
↓$170M
Q1 2026
The most recent reported figure, in the company's own currency and reporting cadence.
QoQ
↓-6.1%
vs Q4 2025
How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.
YoY
→-5.6%
vs Q1 2025
How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.
CAGR
•—
insufficient history
The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.
| Metric | 3 yr | 2 yr | 1 yr |
|---|---|---|---|
| Revenue | — | — | +20.1% $1.2B→$1.5B |
| Net income | — | — | +49.1% $210M→$313M |
| Free cash flow | — | — | -5.6% $180M→$170M |
P/E TTM
↑304.7×
Trailing twelve months. Today's price divided by the last year of actual earnings.
P/E NTM
↑85.1×
Next twelve months. Today's price divided by what analysts expect the company to earn over the coming year.
Profitability
↑Strong
Operating margin (and the wider return profile) tells you how efficiently each dollar of sales becomes profit. High and rising = pricing power; low or falling = the business is grinding.
Share count
→Stable
Are the buybacks outrunning the stock-based comp? A shrinking share count means every existing share owns a bigger slice of future earnings.
Debt load
↑Light
Total debt against cash and earnings power (EBITDA). Light debt leaves room to invest and weather downturns; heavy debt shrinks the margin for error.
Debt service
↑Strong
Whether the cash the business generates easily covers its interest and loan payments. Strong here = no forced selling in a bad year.
Cash return at today's price
↓0.3%
Free cash flow divided by market cap — the cash yield you're getting for the price you pay. Above ~6% is rich, below ~3% is thin. P/E shown when the yield is too small to be useful.
Despite being significantly oversold and entering an area where buyers might emerge, the impending earnings report in 13 days introduces substantial event risk. The recent downward momentum is strong, and while the long-term thesis remains intact, engaging before clarity from the earnings report is speculative. It is advisable to wait for the earnings release and subsequent price action to confirm a stable bottom or a clear entry point.
Short-term thesis
Arm's critical role as the architect of power-efficient computing IP, particularly with its v9 architecture, positions it at the forefront of AI and next-generation device development. The unique royalty model, coupled with expanding adoption and higher-value IP, underpins significant earnings growth potential. Despite a premium valuation and recent market volatility, the ongoing demand for efficient processing power in AI and adjacent markets continues to validate Arm's long-term investment narrative.
Long-term exposure
Own
The business backdrop is strong enough for long-term exposure.
Entry window
Wait
The stock has experienced a significant downturn and is now trading well below its short-term price average, entering a potential oversold zone. While this creates an attractive setup for patient buyers, the near-term volatility and a critical earnings report scheduled for next week suggest caution. It's prudent to observe how price action develops around these levels and to wait for the earnings event to pass before making a move.
Risk check
Fragile
The downside can widen quickly if this setup goes wrong.
Alignment
Aligned
Arm's business model and unique position fully align with massive secular trends in AI, IoT, and edge computing, ensuring strong future demand for its IP.
What supports it
What limits it
Long-term thesis
The pervasive integration of Arm's power-efficient CPU IP (especially v9) into the global AI infrastructure, from edge devices to data centers, as the foundational compute architecture for energy-efficient high-performance processing.
Bottleneck Role
Arm acts as a critical bottleneck due to the highly specialized and power-efficient nature of its IP (especially v9), which is difficult and time-consuming for competitors to replicate. Its extensive ecosystem and software compatibility further entrench its position, creating a scarcity of viable alternatives for high-performance, low-power chip designs for AI and other advanced applications.
Consensus Blind Spot
The market may be underestimating the stickiness and increasing value capture of Arm's IP as chip complexity and performance demands for AI escalate. The shift to higher-value v9 architecture and the expansion into server/cloud markets may not be fully reflected in current long-term growth models, which still might overemphasize traditional mobile exposure. The increasing mix shift towards higher royalty rate chips, rather than just unit volume, is a significant earnings lever.
Demand Gap
The demand for increasingly sophisticated edge and cloud AI capabilities far exceeds the current supply of truly power-efficient, high-performance computing solutions where Arm-based chips have a distinct advantage. This gap is widening as AI models become more complex.
Demand to Equity Scenarios
Slower-than-expected AI adoption or increased competitive pressure from RISC-V in high-value segments.
Demand
-10%
Earnings
-15%
Equity implication
-25%
Reduced licensing of new architectures and lower royalty rates per chip, especially in advanced designs.
Continued strong traction of v9 architecture, stable growth in AI/IoT. Accelerating per-chip royalty rates.
Demand
+15%
Earnings
+20%
Equity implication
+30%
Increased revenue per chip and sustained licensing growth across diverse end markets.
Accelerated AI adoption and pervasive integration of Arm IP into new computing paradigms, leading to widespread v9 adoption and higher-than-expected royalty rates.
Demand
+30%
Earnings
+40%
Equity implication
+60%
Rapid expansion of high-value IP licensing, significant upsides from CSS and software, disproportionate increase in average royalty per chip.
Dependency Chain
Repricing Triggers
Must be true
Thesis broken if
What changed
Signal
Conviction
Long term
Stock
Added since last run
7No longer flagged
0Nothing dropped this run
The prior call successfully identified a need for consolidation or pullback closer to support levels following a sharp decline. Given the continued decline this week, the reasoning for 'WAIT' was correct in avoiding further drawdowns, although it indicated minimal movement rather than significant downside.
Jul 16, 2026
LatestUpdated Jul 16, 2026, 8:52 PM UTC
Price at review
$262
The stock has experienced a significant downturn and is now trading well below its short-term price average, entering a potential oversold zone. While this creates an attractive setup for patient buyers, the near-term volatility and a critical earnings report scheduled for next week suggest caution. It's prudent to observe how price action develops around these levels and to wait for the earnings event to pass before making a move.
Jun 12, 2026
Updated Jun 12, 2026, 9:58 AM UTC
Price at review
$342
Following a recent and sharp decline, the stock is now extended significantly above its short-term and long-term moving averages. While the underlying business strength and structural demand remain intact, the price needs to consolidate further or pull back closer to support levels for a more favorable entry point. Expect continued choppiness this week.
Jun 5, 2026
Updated Jun 5, 2026, 9:37 AM UTC
Price at review
$393
Expect price to take a breather as the recent vertical climb settles into a more sustainable range.
May 29, 2026
Updated May 29, 2026, 8:47 AM UTC
Price at review
$335
The stock is in an exceptionally strong upward move but is currently too far ahead of its typical price floor. Expecting a period of sideways trading or a sharp dip before the next safe entry point.
May 13, 2026
Updated May 13, 2026, 4:57 PM UTC
Price at review
$218
The short-term trend is struggling to find a sustainable floor. Expect choppy behavior as the market tries to balance high demand with an expensive entry price.
Jan 21, 1970
Updated Apr 28, 2026, 4:41 PM UTC
Price at review
$198
Distribution characteristics persist with second consecutive distribution day; price has compressed 16.5% from $237.68 rejection but remains 13.3% above daily 21 EMA with no consolidation or pullback entry formed. Earnings in 9 days creates asymmetric event risk with no margin of safety at 92.6x forward earnings.