ARM · Arm Holdings

The thesis

Arm Holdings shares look more likely to lag the S&P 500 than lead it over the next three months. Royalty revenue, the fee Arm earns on each Arm-based chip shipped, grew only 8% in the September quarter and is guided to low single-digit growth for the December quarter. Two events settle the case. The first is Judge Maryellen Noreika's ruling on Qualcomm's five-year royalty suspension, which has no date. The second is the next quarterly report, estimated for early February 2027.

The shares rebounded with the AI chip group in the week of 9 November 2026. The close rose from $166.72 on 5 November 2026 to $203.36 on 11 November 2026, and Benzinga tied the 11 November 2026 jump to CoreWeave's third-quarter results and a rebound in Nvidia. The rebound did not come from new Arm business news. Royalty guidance and the Qualcomm remedy are unchanged, and coverage through 12 November 2026 reports no ruling from the Delaware court.

The rating is Low because the September-quarter royalty miss and the low December guide matter more over three months than the AI chip outlook. Analysts kept cutting targets after the report, and Piper Sandler's $270 target on 12 November 2026 continued that pattern. The view is wrong if the February report shows royalty growth above the guide, or if the judge declines to apply the suspension.

Bullish and bearish views on Arm Holdings plc

The bull case on Arm Holdings plc (ARM), in brief: AI chip outlook was raised. The bear case: phones pulled royalties below guidance.

Bull case

• AI chip outlook was raised. On the 4 November 2026 call, management said it expects up to $2 billion of Arm AGI CPU revenue across fiscal 2027 and fiscal 2028, up from more than $1 billion. First commercial deliveries remain on track for the March 2027 quarter.
• Licensing revenue is growing fast. Licensing and other revenue was $773 million in the second quarter of fiscal 2027 (Q2 FY27), up 50%. Management guided December-quarter licensing growth slightly above 50% on the 4 November 2026 call.
• New licences signed after the report. Arm announced three new Total Access agreements and four Compute Subsystems (CSS) licences on 6 November 2026, and said AGI CPU orders now run through 2027, fiscal.ai reported.
• Data-center royalties doubled. Arm said on 4 November 2026 that data-center royalties doubled year over year. Royalties from driver-assistance and in-vehicle systems grew 50%.
• Most covering analysts still rate it a buy. After the report, Mizuho set $330 (cut from $400), Evercore ISI $326, Barclays $325 (Overweight, cut from $360), Susquehanna $320 and RBC Capital Markets $300, per TIKR and StockAnalysis on 5 November 2026. Piper Sandler kept a Buy rating with a $270 target on 12 November 2026.

Bear case

• Phones pulled royalties below guidance. Q2 FY27 royalty revenue was $670 million, up 8%, against roughly 13% guided growth. Management said on 4 November 2026 that higher memory prices are hurting smartphone demand. It guided December-quarter royalty growth to low single digits.
• Qualcomm's suspension remedy is pending. A Delaware jury found on 13 October 2026 that Arm breached its architecture licence with Qualcomm and awarded $2 in damages, U.S. News reported. The breach finding lets Qualcomm ask Judge Noreika to suspend its royalties for five years. Coverage through 12 November 2026 reports no decision.
• Targets fell across the board. On 5 November 2026 UBS cut its target to $270 from $320, TD Cowen to $250 from $350 and RBC to $300 from $340, StockAnalysis shows. Morgan Stanley kept a Hold rating with a $212 target. Deutsche Bank cut to $170 from $205 with a Hold rating on 6 November 2026, fiscal.ai reported.
• The rally came from the sector. Benzinga reported that 16 other AI stocks rose more than 10% on 11 November 2026 after CoreWeave's third-quarter beat. The shares gave back part of the move the next day, closing at $199.78 on 12 November 2026.
• SoftBank's balance sheet is stretched. SoftBank Group, the controlling shareholder, reported a July–September net loss of ¥1.1 trillion on 10 November 2026, Reuters reported. Its Arm-backed margin loan rose to ¥3,896.9 billion on 30 September from ¥3,221.0 billion on 30 June, FourWeekMBA reported.

Price setup

The shares closed at $199.78 on 12 November 2026. That is 55.9% below the 52-week intraday high of $452.70 set on 18 June 2026, and 28.5% lower than three months earlier, when the close was $279.44 on 14 August 2026. The 52-week closing low is $104.55, set on 3 February 2026.

The post-report low close was $166.72 on 5 November 2026. The rebound peaked at a close of $203.36 on 11 November 2026. The price sits below both the 200-day average of adjusted closes, $232.41, and the 50-day average, $249.19, as of 12 November 2026. The 50-day average is still above the 200-day average, which reflects the gains made before the June peak.

The price range that matters runs from the $166.72 post-report low to the 50-day average. A return above the 50-day average would erase the post-report decline. No earnings date falls in the 30 days after 12 November 2026.

Catalysts ahead

• Undated (no date set): Judge Noreika's bench rulings on Qualcomm's royalty suspension and the ARMv10 good-faith claim. If the court enforces the five-year suspension, Arm loses a large royalty stream. If it rules the clause an unenforceable penalty, the largest legal risk to the shares goes away.
• ~4 February 2027 (est.): Third-quarter fiscal 2027 report. It tests the low single-digit royalty guide, the $1.54 billion revenue guide and the timing of first AGI CPU deliveries.

What would change the view

A daily close above $249.89, just above the 50-day average of closes, which would erase the post-report decline and show the shares leading the S&P 500. December-quarter royalty growth well above the low single-digit guide would also prove the call wrong.

What it trades with

Arm trades with the AI semiconductor group. It fell in the 5 November 2026 chip selloff and rose more than 9% intraday on 11 November 2026 with CoreWeave, Micron and other AI names, Benzinga reported. Its royalty income depends on smartphone units, so memory-price weakness in handsets hits Arm along with Qualcomm and other phone-chip suppliers. SoftBank has pledged Arm shares against a margin loan, which ties Arm's price to SoftBank's funding news and the performance of SoftBank's other AI investments.