Arm Holdings gives back last week's rally, down over 8%

Summary

The speakers discuss ARM Holdings' sharp pullback and its potential relevance to high-performance computing. They see possible upside but favor caution, citing expense growth outpacing revenue growth and a desire to wait for stabilization and supportive options activity.

• ARM is described as falling about $26 to roughly $284, below $300.
• The speakers cite a 52-week high of $452 and a low near $100.
• ARM develops and licenses CPU products and is compared with Nvidia as a high-performance computing name to watch.
• The discussion cites Q1 2027 revenue growth of about 22% versus operating expense growth of 28%, raising margin concerns.
• Unusual options activity could make the stock more interesting, but the speakers suggest letting the dust settle first.
• One speaker claims ARM's CFO accelerated stock sales, adding to his caution.
• The speakers favor monitoring the stock rather than treating the decline as an immediate buying opportunity.

1. 0:00

   ARM Holdings. Um because ARM Holdings is a stock that of course famously came out just this past year and it's a UKbased company. It's one of the few UK-based companies that actually has uh uh done

2. 0:16

   pretty darn well. Well, so they came out with a direct list, Pete, and the uh 52- week high is $452 a share. The low is a hundred bucks a share. Where is it now? It's down 26 bucks. It broke 300 today. It's 280 388.

3. 0:36

   So, call it 284.

4. 0:38

   >> Um, pretty darn interesting uh that these guys develop and license CPU products. Um, and I think ARM Holdings is one of those stocks that sort of like uh Nvidia, Pete, if you're talking about high performance computing and so forth,

5. 0:57

   uh, this is one of them that should be on your short list.

6. 1:01

   >> Yeah. And it's kind of interesting, John, because they, you know, there's some good and there's some bad. You can figure it out however you want, but I mean, I'm looking at what they talked about with, you know, the Q1 2027.

7. 1:13

   They're talking about revenue up about 22%. That sounds pretty great. The problem is operating expenses are up 28%. So that's what we like to call, hey, uh margins not looking so great, right? That's a nice step for the margins to uh in the wrong direction.

8. 1:29

   But you know what, as as you were talking about, this thing has kind of been all over the map. 452 for a high and here we are underneath 300. You were talking about I think 284. Um, you know, it started off the day okay and then started getting sell off. I I think this is one of those names that under the right circumstances, if we saw some

9. 1:47

   paper that came in there, it might be some a point in time where it gets kind of interesting. But I'm not so sure that we're going to see some of that unusual option paper in there right now, John. I think it might take a little while, let the dust settle a little bit. I mean, even their CFO decided to go a lot quicker in some selling of the stock

10. 2:07

    because he wanted to catch it before it really dropped any further. So, there is some storylines there that that make me think that I'm a I this isn't one of those where, oh, we we've got to do this. I think this is one of those where we'll keep a nice close eye on it, but um it's going to have to show us that

11. 2:24

    there's still room to the upside, >> right? And I I think there is, but I think you're wise to be uh um cautious of

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