Snap and Celestica Post Strong Earnings, Stocks Rise
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8h ago
0mins
Should l Buy ARM?
Source: seekingalpha
- Snap's Strong Earnings: Snap reported 474 million daily active users in Q4, up 21 million year-over-year but down 3 million sequentially, with an ARPU of $3.62 exceeding the $3.56 consensus, indicating stability in its user base and improved profitability, while Q1 revenue guidance of $1.50B to $1.53B slightly misses market expectations.
- Celestica Beats Expectations: Celestica's Q4 revenue surged 43% year-over-year to $3.65 billion, surpassing the $3.49 billion consensus, with Q1 revenue guidance of $3.85 billion to $4.15 billion reflecting strong AI-driven data center demand, and a raised full-year 2026 revenue outlook to $17 billion from $16 billion.
- Qualcomm's Weak Outlook: Qualcomm shares fell 11% after issuing Q2 guidance with adjusted EPS of $2.45 to $2.65, significantly below the $2.90 consensus, and revenue expectations also missed, highlighting memory supply constraints and pricing pressures affecting handset demand, despite healthy premium smartphone demand.
- Arm Holdings Misses Licensing Revenue: Arm Holdings shares dropped 6% despite solid FQ3 results, as licensing revenue came in at $505 million, below the $519.9 million consensus, with FQ4 adjusted EPS guidance of $0.54 to $0.62 failing to excite investors.
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Analyst Views on ARM
Wall Street analysts forecast ARM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARM is 173.44 USD with a low forecast of 120.00 USD and a high forecast of 215.00 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.
20 Analyst Rating
14 Buy
4 Hold
2 Sell
Moderate Buy
Current: 104.900
Low
120.00
Averages
173.44
High
215.00
Current: 104.900
Low
120.00
Averages
173.44
High
215.00
About ARM
Arm Holdings plc is engaged in operating a global computing platform. It architects, develops, and licenses high-performance and energy-efficient Arm compute platforms. The Company’s principal operations and activities are the licensing, marketing, research and development of central processing unit (CPU) design intellectual property (IP), graphics processors, system IP, market optimized platform IP, and associated software, tools and other related services. Its complementary products include GPU and NPU accelerators, interconnect, and others. Its primary product offerings are CPU products that address diverse performance, power, and cost requirements. It offers a family of GPU and NPU products providing efficient computing acceleration and an optimal visual experience across a wide range of devices. Its CPU, GPU, and System IP products integrated into a foundational compute platform optimized for a specific end market.
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.
Arm Reports 26% Revenue Growth to $1.24 Billion in Q3
- Record Revenue: Arm's Q3 revenue surged 26% year-over-year to $1.24 billion, marking a record quarterly revenue and the fourth consecutive billion-dollar revenue quarter, indicating strong demand in AI and data center markets.
- Significant Royalty Growth: The company reported a 27% year-over-year increase in royalty revenue to $737 million, driven by expansion in target markets such as AI, smartphones, and edge computing, reflecting the growing scale of Arm's ecosystem.
- Rising Operating Expenses: Despite strong revenue performance, Arm's adjusted operating expenses reached $716 million, a 37% increase from the previous year, raising investor concerns and leading to an over 8% drop in stock price during after-hours trading.
- Optimistic Outlook: Arm expects Q4 revenue to range between $1.42 billion and $1.52 billion, with an average analyst expectation of $1.44 billion, demonstrating confidence in future growth, although projected earnings per share are slightly below analyst forecasts.
See More
Significant Stock Movements in Midday Trading
- McKesson Earnings Beat: McKesson's fiscal third-quarter earnings per share exceeded Wall Street's highest estimates, and the adjusted full-year EPS guidance was raised above analyst consensus, leading to a 16% stock price increase, indicating strong performance in the medical supply sector.
- Bob's Discount Furniture IPO: Bob's Discount Furniture debuted on the New York Stock Exchange with shares priced at $17, recently rising 10%, marking a successful entry into the public market and laying the groundwork for future growth.
- Fluence Energy Earnings Miss: Fluence Energy reported first-quarter revenue of $475.2 million, falling short of the $481.2 million consensus, with a per-share loss of 34 cents missing the 21-cent loss estimate, resulting in a 31% stock price drop, reflecting market concerns over its profitability.
- Cardinal Health Guidance Raised: Cardinal Health reported quarterly adjusted earnings of $2.63 per share, exceeding the $2.36 consensus, with revenue of $65.63 billion surpassing the $64.14 billion estimate, leading to an 8% stock price increase, showcasing strong growth potential in the healthcare services sector.
See More
Software Stocks Plunge for Eighth Session Amid AI Demand Concerns
- Software Sector Decline: Software stocks fell for the eighth consecutive session on Thursday, marking the longest losing streak since May 2021, as investor concerns about AI undermining demand in the SaaS economy intensified.
- ETF Performance: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) dropped 1.9%, extending its decline to approximately 30% from late October highs, indicating a waning confidence in tech stocks.
- Individual Stock Movements: Palantir Technologies Inc. (NASDAQ:PLTR) fell 4.4% after an 11% drop on Wednesday, suggesting a diminishing market expectation for its growth prospects in the AI-driven landscape.
- Broader Economic Impact: Bitcoin slid 9% to $66,000, negatively impacting software stocks tied to crypto markets, while commodities also faced broad declines, with silver plunging 13% to $76 an ounce and gold slipping 2% to $4,865 per ounce.
See More
Arm Holdings Reports Strong Quarterly Results, Stock Surges
- Significant Revenue Growth: Arm Holdings reported revenues of $1.242 billion for Q3, reflecting a 9% sequential and 26% year-on-year increase, surpassing the consensus estimate of $1.23 billion, driven by strong performance in smartphones and cloud data centers.
- Earnings Beat Expectations: The company posted non-GAAP earnings of $0.43 per share, exceeding the consensus of $0.41, primarily due to higher royalty revenues and slightly lower operating expenses, indicating effective cost management by the management team.
- Optimistic Future Guidance: Management guided for a midpoint revenue of $1.470 billion for the next quarter, representing an 18% sequential and year-on-year growth, slightly above consensus estimates, suggesting continued strength in data center momentum and licensing revenues.
- Market Share Expansion: Arm's data center royalty revenue more than doubled year-on-year, while smartphone royalty rates grew faster than the market, indicating the company's ability to capture a larger share in rapidly growing markets.
See More
Arm Holdings Earnings Report Causes Stock Volatility
- Significant Revenue Growth: Arm Holdings reported a 26% year-over-year revenue increase to $1.24 billion, surpassing market expectations of $1.23 billion, indicating strong demand in the power-efficient CPU design sector despite broader tech stock struggles.
- License and Royalty Revenue Boost: License revenue rose 25% to $505 million, while royalty revenue increased 27% to $737 million, primarily driven by the success of new products like Armv9 and compute subsystems, showcasing the company's successful transition to new technologies.
- Increased R&D Investment: The company ramped up R&D spending by 46% to $512 million, which, while narrowing margins, underscores Arm's commitment to future technological innovation and may lay the groundwork for long-term growth.
- Cautious Future Outlook: Arm forecasts next quarter's revenue between $1.42 billion and $1.52 billion, reflecting only 19% growth, with adjusted EPS expectations of $0.54 to $0.62, indicating concerns over weak smartphone sales, yet maintaining optimism about growth in the AI sector.
See More
Market Volatility: Tech Stocks Decline Amid Selling Pressure
- Market Volatility: On Thursday, stocks fell as software stocks faced a sell-off, with Alphabet and Amazon down 4.3% and 4.8% respectively, pulling the Nasdaq down 1.4% and the S&P 500 down 1%, indicating fragile market sentiment.
- Investor Sentiment: Despite Alphabet reporting stronger-than-expected fourth-quarter earnings, its stock dropped nearly 5%, primarily due to investor concerns over the much larger-than-expected 2026 capex guidance, which may impact future returns.
- Buying Opportunity: Jim Cramer noted Eli Lilly's stock dropped nearly 7% due to a competitor launching a cheaper weight-loss drug, but he believes the company's upcoming weight-loss pill, orforglipron, will provide growth potential in the U.S. and internationally.
- Investment Strategy: Cramer emphasized the importance of a diversified portfolio to mitigate recent market downside risks, particularly as high-multiple stocks face pressure while industrials and materials show relative strength.
See More
Arm Reports 26% Revenue Growth to $1.24 Billion in Q3
- Record Revenue: Arm's Q3 revenue surged 26% year-over-year to $1.24 billion, marking a record quarterly revenue and the fourth consecutive billion-dollar revenue quarter, indicating strong demand in AI and data center markets.
- Significant Royalty Growth: The company reported a 27% year-over-year increase in royalty revenue to $737 million, driven by expansion in target markets such as AI, smartphones, and edge computing, reflecting the growing scale of Arm's ecosystem.
- Rising Operating Expenses: Despite strong revenue performance, Arm's adjusted operating expenses reached $716 million, a 37% increase from the previous year, raising investor concerns and leading to an over 8% drop in stock price during after-hours trading.
- Optimistic Outlook: Arm expects Q4 revenue to range between $1.42 billion and $1.52 billion, with an average analyst expectation of $1.44 billion, demonstrating confidence in future growth, although projected earnings per share are slightly below analyst forecasts.
See More
Significant Stock Movements in Midday Trading
- McKesson Earnings Beat: McKesson's fiscal third-quarter earnings per share exceeded Wall Street's highest estimates, and the adjusted full-year EPS guidance was raised above analyst consensus, leading to a 16% stock price increase, indicating strong performance in the medical supply sector.
- Bob's Discount Furniture IPO: Bob's Discount Furniture debuted on the New York Stock Exchange with shares priced at $17, recently rising 10%, marking a successful entry into the public market and laying the groundwork for future growth.
- Fluence Energy Earnings Miss: Fluence Energy reported first-quarter revenue of $475.2 million, falling short of the $481.2 million consensus, with a per-share loss of 34 cents missing the 21-cent loss estimate, resulting in a 31% stock price drop, reflecting market concerns over its profitability.
- Cardinal Health Guidance Raised: Cardinal Health reported quarterly adjusted earnings of $2.63 per share, exceeding the $2.36 consensus, with revenue of $65.63 billion surpassing the $64.14 billion estimate, leading to an 8% stock price increase, showcasing strong growth potential in the healthcare services sector.
See More
Software Stocks Plunge for Eighth Session Amid AI Demand Concerns
- Software Sector Decline: Software stocks fell for the eighth consecutive session on Thursday, marking the longest losing streak since May 2021, as investor concerns about AI undermining demand in the SaaS economy intensified.
- ETF Performance: The iShares Expanded Tech-Software Sector ETF (NYSE:IGV) dropped 1.9%, extending its decline to approximately 30% from late October highs, indicating a waning confidence in tech stocks.
- Individual Stock Movements: Palantir Technologies Inc. (NASDAQ:PLTR) fell 4.4% after an 11% drop on Wednesday, suggesting a diminishing market expectation for its growth prospects in the AI-driven landscape.
- Broader Economic Impact: Bitcoin slid 9% to $66,000, negatively impacting software stocks tied to crypto markets, while commodities also faced broad declines, with silver plunging 13% to $76 an ounce and gold slipping 2% to $4,865 per ounce.
See More
Arm Holdings Reports Strong Quarterly Results, Stock Surges
- Significant Revenue Growth: Arm Holdings reported revenues of $1.242 billion for Q3, reflecting a 9% sequential and 26% year-on-year increase, surpassing the consensus estimate of $1.23 billion, driven by strong performance in smartphones and cloud data centers.
- Earnings Beat Expectations: The company posted non-GAAP earnings of $0.43 per share, exceeding the consensus of $0.41, primarily due to higher royalty revenues and slightly lower operating expenses, indicating effective cost management by the management team.
- Optimistic Future Guidance: Management guided for a midpoint revenue of $1.470 billion for the next quarter, representing an 18% sequential and year-on-year growth, slightly above consensus estimates, suggesting continued strength in data center momentum and licensing revenues.
- Market Share Expansion: Arm's data center royalty revenue more than doubled year-on-year, while smartphone royalty rates grew faster than the market, indicating the company's ability to capture a larger share in rapidly growing markets.
See More
Arm Holdings Earnings Report Causes Stock Volatility
- Significant Revenue Growth: Arm Holdings reported a 26% year-over-year revenue increase to $1.24 billion, surpassing market expectations of $1.23 billion, indicating strong demand in the power-efficient CPU design sector despite broader tech stock struggles.
- License and Royalty Revenue Boost: License revenue rose 25% to $505 million, while royalty revenue increased 27% to $737 million, primarily driven by the success of new products like Armv9 and compute subsystems, showcasing the company's successful transition to new technologies.
- Increased R&D Investment: The company ramped up R&D spending by 46% to $512 million, which, while narrowing margins, underscores Arm's commitment to future technological innovation and may lay the groundwork for long-term growth.
- Cautious Future Outlook: Arm forecasts next quarter's revenue between $1.42 billion and $1.52 billion, reflecting only 19% growth, with adjusted EPS expectations of $0.54 to $0.62, indicating concerns over weak smartphone sales, yet maintaining optimism about growth in the AI sector.
See More
Market Volatility: Tech Stocks Decline Amid Selling Pressure
- Market Volatility: On Thursday, stocks fell as software stocks faced a sell-off, with Alphabet and Amazon down 4.3% and 4.8% respectively, pulling the Nasdaq down 1.4% and the S&P 500 down 1%, indicating fragile market sentiment.
- Investor Sentiment: Despite Alphabet reporting stronger-than-expected fourth-quarter earnings, its stock dropped nearly 5%, primarily due to investor concerns over the much larger-than-expected 2026 capex guidance, which may impact future returns.
- Buying Opportunity: Jim Cramer noted Eli Lilly's stock dropped nearly 7% due to a competitor launching a cheaper weight-loss drug, but he believes the company's upcoming weight-loss pill, orforglipron, will provide growth potential in the U.S. and internationally.
- Investment Strategy: Cramer emphasized the importance of a diversified portfolio to mitigate recent market downside risks, particularly as high-multiple stocks face pressure while industrials and materials show relative strength.
See More
