This article first appeared on GuruFocus .
Arm Holdings ( NASDAQ:ARM ), the British developer of processor architectures, sank 12.45% to $167.93 at 11:15 a.m. ET in November 5 regular trading. Its November 4 earnings release delivered revenue growth, but that failed to stop the selling. The Wall Street Journal also reported post-results weakness, while market data tracked the session's decline.
Revenue climbed 27% year over year to $1.443 billion in the fiscal second quarter, according to Arm's shareholder letter , with licensing and other revenue jumping 50% to $773 million. Royalties rose a slower 8% to $670 million, even as data-center royalties doubled. Non-GAAP earnings reached 52 cents per share, up 33%. Licensing supplied roughly 54% of sales, leaving investors watching whether those agreements can generate faster recurring royalty growth as customers move chips into production.
The GuruFocus snapshot adds a valuation wrinkle: Arm carries a GF Score of 74/100 and a price-to-earnings ratio of 172.23. Its radar chart shows stronger growth and GF Value readings alongside weak momentum, suggesting the business's strengths have offered limited protection from selling pressure. Doubling data-center royalties is encouraging, but broader royalty growth remains the test. Arm needs its AI opportunity to produce a more durable earnings stream to support that demanding multiple.
