Arm's Licensing Revenue Misses Estimates, Shares Plunge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy QCOM?
Source: Newsfilter
- Licensing Revenue Decline: Arm's fiscal Q3 licensing revenue increased by 25% year-over-year to $505 million, yet fell short of Wall Street's expectation of $519.9 million, resulting in a 7.48% drop in after-hours trading, reflecting market concerns about future growth.
- Record Quarterly Revenue: Despite the licensing revenue miss, Arm achieved a record total revenue of $1.242 billion for the quarter, surpassing LSEG SmartEstimates by 1.54%, driven by strong demand in artificial intelligence.
- Smartphone Exposure Risks: Arm's chip designs are widely used in smartphones, but the outlook is clouded by potential declines in smartphone production due to memory shortages, which could further impact Arm's business prospects.
- Diversification Challenges: While Arm is attempting to diversify into AI chips for data centers and servers, its business model remains heavily reliant on royalties from consumer products, leaving future success uncertain.
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Analyst Views on QCOM
Wall Street analysts forecast QCOM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for QCOM is 197.14 USD with a low forecast of 165.00 USD and a high forecast of 225.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
10 Buy
5 Hold
1 Sell
Moderate Buy
Current: 147.180
Low
165.00
Averages
197.14
High
225.00
Current: 147.180
Low
165.00
Averages
197.14
High
225.00
About QCOM
Qualcomm Incorporated is engaged in the development and commercialization of foundational technologies for the wireless industry, including third generation (3G), fourth generation (4G) and fifth generation (5G) wireless connectivity, and high-performance and low-power computing, including on-device artificial intelligence. Its segments include Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Strategic Initiatives. QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including radio frequency front-end, digital cockpit and advanced driver assistance and automated driving, Internet of things including consumer electronic devices, industrial devices and edge networking products. QTL grants licenses or otherwise provides rights to use portions of its intellectual property portfolio that includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Licensing Revenue Decline: Arm's fiscal Q3 licensing revenue increased by 25% year-over-year to $505 million, yet fell short of Wall Street's expectation of $519.9 million, resulting in a 7.48% drop in after-hours trading, reflecting market concerns about future growth.
- Record Quarterly Revenue: Despite the licensing revenue miss, Arm achieved a record total revenue of $1.242 billion for the quarter, surpassing LSEG SmartEstimates by 1.54%, driven by strong demand in artificial intelligence.
- Smartphone Exposure Risks: Arm's chip designs are widely used in smartphones, but the outlook is clouded by potential declines in smartphone production due to memory shortages, which could further impact Arm's business prospects.
- Diversification Challenges: While Arm is attempting to diversify into AI chips for data centers and servers, its business model remains heavily reliant on royalties from consumer products, leaving future success uncertain.
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- Revenue Expectations: The anticipated quarterly revenue of $12.18 billion shows an increase from $11.67 billion last year, yet reflects signs of slowing growth that may impact investor confidence moving forward.
- Analyst Rating Adjustment: Cantor Fitzgerald analyst C.J. Muse has maintained a Neutral rating on Qualcomm while lowering the price target from $185 to $160, suggesting a cautious outlook on the company's future performance amid market uncertainties.
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See More
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- Licensing Revenue Miss: ARM's fiscal Q3 licensing revenue rose 25% year-over-year to $505 million, yet fell short of Wall Street's $519.9 million estimate, causing shares to plunge 7.48% in after-hours trading, reflecting investor concerns about future growth prospects.
- Qualcomm's Disappointing Outlook: Qualcomm's fiscal Q1 results exceeded expectations, but its disappointing forecast due to global memory shortages led to a 9.68% drop in after-hours trading, highlighting market sensitivity to semiconductor supply chain issues.
- Record Revenue Driven by AI: Despite missing licensing revenue expectations, ARM achieved a record quarterly revenue of $1.242 billion for the last three months of 2025, driven by demand for artificial intelligence, indicating potential in emerging markets, though reliance on consumer products remains a challenge.
- Uncertain Market Outlook: Analysts warn that if Chinese smartphone production declines next year due to memory shortages, ARM's outlook could worsen, as the company attempts to diversify into AI chips, but the success of this strategy remains uncertain.
See More
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- Licensing Revenue Decline: Arm's fiscal Q3 licensing revenue increased by 25% year-over-year to $505 million, yet fell short of Wall Street's expectation of $519.9 million, resulting in a 7.48% drop in after-hours trading, reflecting market concerns about future growth.
- Record Quarterly Revenue: Despite the licensing revenue miss, Arm achieved a record total revenue of $1.242 billion for the quarter, surpassing LSEG SmartEstimates by 1.54%, driven by strong demand in artificial intelligence.
- Smartphone Exposure Risks: Arm's chip designs are widely used in smartphones, but the outlook is clouded by potential declines in smartphone production due to memory shortages, which could further impact Arm's business prospects.
- Diversification Challenges: While Arm is attempting to diversify into AI chips for data centers and servers, its business model remains heavily reliant on royalties from consumer products, leaving future success uncertain.
See More
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- Alphabet Stock Decline: Alphabet's Class C shares fell by 2.16% to $333.34, even though it reached an intraday high of $344.25, reflecting cautious sentiment among investors towards tech stocks, which may impact future investment decisions.
- Qualcomm's Modest Rise: Qualcomm's stock increased by 1.16% to $148.89, but sharply dropped by 9.68% to $134.48 in after-hours trading, showcasing a divergence in market sentiment regarding its future outlook.
- Snap's Price Fluctuation: Snap's shares declined by 3.11% to $5.91, although they rebounded by 2.88% to $6.08 in after-hours trading, indicating a mix of concerns over profitability and hopes for a short-term recovery.
See More
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