TLDR
- ARM stock dropped 8% but is still up around 80% year-to-date
- Q4 2026 earnings expected on May 6; analysts forecast $0.58 EPS and $1.47B revenue
- Wells Fargo raised its price target to $220, keeping an Overweight rating
- Guidance, not past results, will likely drive the next move in the stock
- Wall Street consensus is Strong Buy; average price target is $183.71
ARM stock pulled back sharply on Wednesday, falling 8% to open at $198.65. Despite the drop, the stock is still up roughly 80% so far this year, reflecting how much AI-driven optimism has been baked into the price.
Arm Holdings plc American Depositary Shares, ARM
The selloff comes just days before the company reports Q4 2026 earnings after the close on May 6.
Analysts are expecting earnings of $0.58 per share on revenue of $1.47 billion for the quarter. That would represent continued growth from last quarter, when ARM beat estimates with $0.43 EPS on $1.24 billion in revenue â up 26.3% year-over-year.
Wells Fargo moved its price target up to $220 from $175 this week, keeping an Overweight rating. The firm cited ARM’s strong positioning in AI-driven data center markets, where demand for power-efficient chips keeps climbing.
But Wells Fargo also flagged the near-term setup as tricky. After a big run, the bar is high. The firm noted that Q4 is a “tougher setup given recent move,” and expects management to simply reiterate its 2027 revenue growth outlook of around 20% year-over-year.
What to Watch on May 6
Guidance will matter more than the headline numbers. Investors want to see updates on AI demand, data center momentum, and royalty trends â the core of ARM’s business.
If management raises its forecast, the stock could bounce back quickly. If guidance is just reaffirmed, the recent dip may have more room to run.
The stock’s P/E ratio sits at 264.87, which leaves little room for disappointment. That’s the tension heading into next week.
On the insider side, CFO Jason Child sold 21,280 shares in late March at around $148.37, and CEO Rene Haas sold 23,867 shares at $161.17. Insiders have sold a total of 83,712 shares worth about $13.6 million over the past three months.
Institutional ownership stands at 7.53%, with several smaller funds initiating new positions in recent quarters.
Analyst Ratings
The Street remains broadly positive. Of 24 analysts covering the stock, 19 rate it a Buy, four a Hold, and one a Sell. The average price target is $183.71 â which actually implies about 7.5% downside from Wednesday’s open.
That gap between consensus target and current price is worth noting. Even with a Strong Buy rating, the average analyst doesn’t see much upside from here in the near term.
HSBC made one of the more dramatic moves recently, upgrading ARM from Reduce to Buy and lifting its target from $90 to $205 in March. JPMorgan, Evercore, and UBS all trimmed targets back in February following the last earnings report.
ARM’s 52-week range runs from $100.02 to $237.68, and the stock is currently sitting well above both its 50-day ($145.44) and 200-day ($136.84) moving averages.
The earnings call is set for 5:00 PM ET on May 6.
đ¨ Our April Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for April, highlighting companies with strong momentum that rank highly on our KO Score algorithm. Weâre also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
