Shares of Arms Holding traded in a wild range between 160 and $170 on Thursday following the company's earnings report.
For the quarter the company beat on top and bottom line with earnings per share of $0.39 beating estimates by $0.05 for the quarter. The company also beat on top line revenue with $983 million, compared to Wall Street consensus estimates of $949 million.
With the stock trading down 3% at midday, investors problem wasn't with the earnings results, but instead with what the company expects looking forward.
For its next quarters, Arms Holdings guided expectations to A range of $0.48 to $0.56 per share. Wall Street's current estimate is for 52 cents straight in the middle of that range leaving investors unimpressed. Arm’s revenue estimates also Come in line with Wall Street expectations.
The company CEO has commented that they're seeing an adoption of artificial intelligence on every single device that he does not see slowing down in the near-term future. In addition, ARM CEO commented that general purpose computing adoption of AI is speeding up as well.
With more than 50% of new installations using ARM products, the company doesn't see a slowdown in business For ARM Holdings or NVIDIA chips.
Shares of Armed Holding have seen a wild two weeks of trading during which the stock ran from $140.00 to $180, then returning to the middle of that range. The volatility in Harm's holdings is due to ongoing declines in NVIDIA stock and the negative perception that casts on the semiconductor sector.
That said, arm holding chairs have the benefit of a very strong technical backdrop.
All three of the market’s most-watched technical trendlines are shifting into a new bullish trend.
In January, ARM’s 50- and 200-day moving averages shifted into a new bullish trend as the stock emerged from a five-month trading range. Now, both trendlines are providing strong support and forecasting higher prices.
The stock is also preparing to move above the $170 level which puts shares within a pitching wedge shot of breaking to new all-time highs.
Technical traders will take note of the recent bullish momentum and recognize that the stock is preparing for its next 15%-30% move higher.
Shares of Arm Holdings trade above their bullish 20-month moving average, putting them in a long-term bull market trend. The stock holds a price target of $225.
