Arm Holdings plc (NASDAQ:ARM) stock fell more than 7% on Monday as investors continued to sell high-valuation semiconductor and artificial intelligence-related stocks during a broader risk-off session.
The Nasdaq dropped 1.73%, while the S&P 500 lost 0.68%.
Technology was the day’s weakest-performing sector, down 2.3%, adding to the pressure on Arm shares. Investors rotated into more defensive sectors, with Energy gaining 2.76% and Utilities rising 0.56%.
Although seven of the 11 S&P 500 sectors traded higher, leadership came from outside Technology. That shift hurt many momentum-driven semiconductor stocks, including Arm.
Technical Picture Weakens
Arm is trading 15.8% below its 20-day simple moving average of $354.35 and 4.1% below its 50-day average of $311.14, signaling growing short-term weakness.
However, the longer-term trend remains positive. The stock still trades 30.5% above its 100-day moving average and 63.9% above its 200-day moving average.
Momentum indicators have weakened. The MACD remains below its signal line, suggesting bullish momentum has faded.
The stock also continues to hold above the “golden cross” formed in April, when the 50-day moving average crossed above the 200-day moving average. Traders are now watching whether shares can hold support near $298.50.
Earnings And Analyst Outlook
Arm is scheduled to report quarterly results on July 29.
Wall Street expects earnings of 36 cents per share, up from 35 cents a year earlier, on revenue of $1.27 billion, compared with $1.05 billion last year.
The stock trades at about 380.5 times earnings, reflecting its premium valuation.
Analysts maintain a consensus Buy rating with an average price forecast of $274.90. Recent analyst actions include:
- TD Cowen raised its price forecast to $475 and maintained a Buy rating.
- UBS raised its price forecast to $470 and reiterated Buy.
- Bank of America maintained a Neutral rating and increased its price forecast to $460.
Benzinga Edge Ratings
Benzinga Edge assigns Arm a Momentum score of 98.28, reflecting its strong longer-term trend despite Monday’s decline.
The stock receives a Value score of 1.41, indicating investors continue to assign a rich valuation based on expectations for future growth.
ETF Exposure
Arm is a notable holding in several technology-focused exchange-traded funds, including:
- REX AI Equity Premium Income ETF (NASDAQ:AIPI)
- First Trust International Equity Opportunities ETF (NASDAQ:FPXI)
- VanEck Fabless Semiconductor ETF (NASDAQ:SMHX)
Because Arm carries meaningful weight in these funds, ETF inflows and outflows can influence trading in the stock.
ARM Stock Price Activity: ARM Holdings shares were down 7.11% at $300.40 at the time of publication on Monday, according to Benzinga Pro data.
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