Arm Shares Pull Back from Rally That Almost Doubled Chip Designer's Value

Shares slumped 19% to $120.73, ending a four-day rally. While that looks substantive, the stock is still up about 67% over the past five days.

The US-listed stock of the Cambridge, England-based semiconductor company surged last week after company raised its full year guidance, beating estimates.

The company's new revenue outlook for the full year was $3.155 billion to $3.205 billion, compared with a previous guidance of between $2.960 billion and $3.080 billion, according to Dow Jones. Earnings per share is seen between $1.20 and $1.24 for the year, higher than the $1.06 expected by analysts, the report showed.

For the fiscal third quarter that ended Dec. 31, the company reported a 14% increase in revenue to $824 million, exceeding the average estimate of $762.5 million by analysts polled by FactSet, Dow Jones reported.

All the six technical indicators tracked by moomoo were bearish over the past day, but there's no guarantee that the negative sentiment will hold for the rest of Tuesday. The 60-minute picture is already neutral, while the one for just 1 minute is turning positive.

In the options market, the calls and puts were almost even at 56:44, with options that give holders the right to buy the stock totalling 203,210, while contracts that give holders the right to sell reached 162,900.

"The AI wave drove licensing growth as these new devices require Arm’s performant and power-efficient compute platform," Arm Chief Executive Officer Rene Haas said in a letter to shareholders that disclosed the company's earnings last week. "We believe this is only the start and that our strategy will drive significant revenue growth for years and decades to come."