Group 1 - The stock market experienced a sharp decline early Friday, but a significant afternoon buying wave helped major indexes recover from lows [3]. - Arm Holdings (ARM) saw a notable drop this past week, triggering a sell signal and breaching a critical support level, which may indicate a potential rebound opportunity for investors [2]. - Arm Holdings is highlighted as Investor's Business Daily's IPO Stock of the Week, reflecting its status as a member of IBD's IPO Leaders screen [2]. Group 2 - The stock market's fluctuations were influenced by external factors, including a government shutdown offer and tariff setbacks related to Trump, which affected various sectors [5]. - Arm Holdings demonstrated improved stock performance with a rise in its relative strength rating to 82, indicating potential for a fresh run [5]. - The overall market saw a recovery in sectors such as biotech and gold stocks, despite the initial downturn [5].

Core Viewpoint - The U.S. stock market is experiencing significant declines, particularly in technology stocks, amid growing concerns over AI valuations and a potential market bubble [2][6]. Market Performance - On November 7, major U.S. indices fell, with the Dow Jones down approximately 200 points, the Nasdaq down over 1.6%, and the S&P 500 down about 1% [2]. - The Nasdaq is heading towards its worst week since April, when a sell-off triggered by tariffs occurred [2]. - The Nasdaq China Golden Dragon Index dropped over 2% [3]. Technology Stock Declines - Popular AI technology stocks collectively fell, with notable declines including ARM down 6.06%, Applovin down 5.38%, AMD down 4.48%, and Nvidia down 3.80% [5]. - Concerns have emerged regarding whether the valuations of AI stocks have reached unsustainable levels following a strong rebound earlier in the year [5]. Economic Indicators - The consumer confidence index in the U.S. fell to its lowest level in over three years, dropping from 53.6 to 50.3 [10]. - The decline in consumer confidence is attributed to worries about the government shutdown and high inflation impacting personal financial expectations [10]. - A significant portion of respondents, 71%, expect unemployment rates to rise in the coming year, more than double the proportion from the previous year [10]. Employment Data - The ADP report indicated a modest increase of 42,000 jobs in the private sector for October, marking the first increase in three months [11]. - The ongoing government shutdown has delayed the release of key federal employment data, complicating economic assessments [11].

Core Viewpoint - The U.S. stock market is experiencing significant declines, particularly in technology stocks, amid growing concerns over AI valuations and economic outlook due to government shutdowns and high inflation [1][11]. Group 1: Market Performance - On November 7, major U.S. indices fell, with the Dow down approximately 200 points, the Nasdaq down over 1.6%, and the S&P 500 down about 1% [1]. - The Nasdaq is heading towards its worst week since the "tariff-induced sell-off" in April, with Chinese concept stocks also dropping over 2% [2]. - AI technology stocks collectively declined, reflecting investor concerns about unsustainable valuations after a strong rebound earlier in the year [4][5]. Group 2: Economic Indicators - The Michigan Consumer Sentiment Index dropped from 53.6 to 50.3, marking the lowest level since June 2022, driven by fears related to the government shutdown and high prices [11][12]. - A significant decline in the index reflecting current economic conditions fell by 6.3 points to 52.3, indicating widespread pessimism across various demographics [12]. - Concerns about rising unemployment are prevalent, with 71% of respondents expecting an increase in the unemployment rate over the next year, more than double the proportion from the previous year [13]. Group 3: Future Outlook - Analysts suggest that the current market downturn may present opportunities for investors to seek better risk-reward scenarios, potentially waiting for a healthy market correction before taking action [6]. - The upcoming Nvidia earnings report is seen as a potential catalyst for reaffirming the AI narrative, with hopes that the end of the government shutdown and possible Fed rate cuts in December could alleviate market pressures [9].

Core Insights - ADNOC's trading unit aims to increase its handled volume by two-thirds in the coming years as part of its international expansion strategy [1] Company Summary - ADNOC's trading unit is focusing on international expansion to enhance its trading capabilities [1] - The CEO of ADNOC's trading unit has indicated a significant growth target, aiming for a two-thirds increase in volume [1]

Core Viewpoint - Arm reported better-than-expected Q2 results and raised its full-year guidance, leading to positive ratings from major Wall Street firms [1][2] Financial Performance - Arm's total revenue for Q2 of fiscal year 2026 increased by 34% to $1.14 billion, surpassing market expectations of $1.06 billion [1] - Operating profit surged by 155% year-over-year to $163 million, with an operating margin of 14.4%, significantly higher than the previous year's 7.6% [1] - Net profit rose by 122% to $238 million, and adjusted earnings per share were $0.39, exceeding the market forecast of $0.33 [1] Market Trends - The expansion of global AI data centers, driven by the demand for AI training and inference workloads, is fueling an unprecedented "ARM architecture wave" [1] - Major cloud computing companies like Amazon, Microsoft, and Google are accelerating the deployment of self-developed ARM architecture server CPUs [1] Future Guidance - For Q3, Arm expects revenue between $1.175 billion and $1.275 billion, with a midpoint of $1.225 billion, above the market expectation of $1.1 billion [1] - The company anticipates adjusted earnings per share of $0.41, also better than the market forecast of $0.35 [1] Analyst Ratings and Price Targets - Mizuho Securities maintained an "Outperform" rating and raised the target price from $180 to $190, citing strong Q2 results and improved Q3 guidance [2] - JPMorgan and Wells Fargo also raised their target prices to $180 and $195, respectively, while Deutsche Bank increased its target from $130 to $150 [2] - Jefferies raised its target price from $173 to $205, reflecting confidence in Arm's performance [2] - Needham maintained a "Hold" rating but adjusted its fourth-quarter expectations downward due to earlier recognition of mobile royalties and accelerated growth in data center royalties [2]

Core Insights - ARM's efficiency in computing platforms is approximately 50% higher than competing solutions, leading to significant adoption by major companies like NVIDIA, Amazon, Google, Microsoft, and Tesla [1][2] - The unprecedented demand for computing power is primarily based on ARM technology, contributing to over 100% year-on-year growth in the Neoverse business segment [1][2] - The Chinese market has shown strong performance with historical high demand, driven mainly by license revenue, including a large licensing deal [1][7] Financial Performance - In Q2, SoftBank-related revenue increased from $126 million to $178 million, a rise of $52 million, which serves as a future reference benchmark [5] - The revenue from SoftBank includes IP licensing and design services, with design services having a lower profit margin [5] Strategic Initiatives - ARM's acquisition of DreamBig Semiconductor is aimed at enhancing its Ethernet and DMA controller capabilities, which will expand its product offerings [3] - Collaboration with SoftBank on the Stargate project is expected to provide significant business opportunities in data center construction [3] Market Trends - The infrastructure business is growing at twice the average rate of other categories, with expectations of a 15% to 20% revenue share in ARM's royalty income [6] - The shift in data center computing from training to inference is anticipated, with strong demand for ARM's technologies in edge computing [7] Future Outlook - ARM maintains confidence in its future prospects based on current capital expenditures and the ongoing strong AI cycle [1][7] - The company plans to provide clearer guidance for Q4 based on its licensing reserves and the timing of large licensing deals [1][7]

Core Viewpoint - Morgan Stanley has raised the target price for Arm Holdings from $175 to $180 while maintaining an "overweight" rating [1] Group 1 - The adjustment in target price reflects positive sentiment towards Arm Holdings' performance and growth potential [1]

Summary of ARM Holdings Conference Call Company Overview - **Company**: ARM Holdings (ARM) - **Industry**: Semiconductors Key Financial Results - **Revenue**: ARM reported revenue of **$1.14 billion**, exceeding Goldman Sachs (GS) and Street estimates of **$1.06 billion** [2] - **Operating Margin**: Recorded at **41.1%**, significantly higher than GS and Street estimates of **36.0%** [2] - **Operating EPS**: Reported at **$0.39**, above GS and Street estimates of **$0.33** [2] - **Licensing Revenue**: Achieved **$515 million**, surpassing GS's estimate of **$473 million** and Street's estimate of **$474 million** [2] - **Royalty Revenue**: Reached **$620 million**, ahead of GS's estimate of **$586 million** and Street's estimate of **$585 million** [2] Guidance for FY3Q - **Revenue Guidance**: Midpoint guidance set at **$1.225 billion**, well above GS's estimate of **$1.09 billion** and Street's estimate of **$1.11 billion** [3] - **Operating Expense Guidance**: Projected at **$720 million**, exceeding GS's estimate of **$675 million** and Street's estimate of **$676 million** [3] - **Operating EPS Guidance**: Expected to be **$0.41**, above GS's estimate of **$0.34** and Street's estimate of **$0.35** [3] Market Expectations and Stock Performance - **Investor Sentiment**: The stock is expected to rise due to better-than-expected revenue and EPS guidance, driven by a recovery in royalty revenue [1] - **Focus Areas for Investors**: Key topics of interest include operational expenses, smartphone market recovery, Datacenter business updates, and contributions from v9 and CSS to royalty revenues [1] Price Target and Risks - **Price Target**: Set at **$150**, based on a multiple of **75x** normalized EPS estimate of **$2.00** [4] - **Risks**: - Slower transition from v8 to v9 and CSS [4] - Less traction in Datacenter business [4] - Faster traction for Compute Sub-Systems [4] - Emergence of new customer cohorts licensing ARM technology [4] Additional Insights - **Quarterly Growth**: Year-over-year revenue growth of **34.5%** and quarter-over-quarter growth of **7.8%** [7] - **Gross Margin**: Excluding stock-based compensation, gross margin was **98.2%**, slightly above estimates [7] - **Market Capitalization**: ARM's market cap stands at **$171.2 billion** [8] This summary encapsulates the key financial metrics, guidance, market expectations, and risks associated with ARM Holdings as discussed in the conference call.

Market Overview - Major U.S. indices experienced declines, with the Dow Jones down 398.7 points (0.84%) to 46,912.3, the Nasdaq down 445.81 points (1.9%) to 23,053.99, and the S&P 500 down 75.97 points (1.12%) to 6,720.32 [1] - European markets also saw declines, with Germany's DAX30 down 346.58 points (1.44%) to 23,702.29, the UK's FTSE 100 down 68.03 points (0.70%) to 9,709.05, and France's CAC40 down 109.46 points (1.36%) to 7,964.77 [2] Commodities - Crude oil prices fell slightly, with NYMEX light crude down $0.17 to $59.43 per barrel (0.29%) and Brent crude down $0.14 to $63.38 per barrel (0.22%) [2] Cryptocurrency - Bitcoin dropped over 2.5% to $101,211.6, while Ethereum fell over 3% to $3,320.34 [3] Precious Metals - Spot gold saw a minor decline of 0.05% to $3,977.22. The World Gold Council reported that global gold ETFs experienced a net inflow of $8.2 billion in October, raising total assets under management to a record high of $503 billion [4] Macroeconomic News - The Federal Reserve's Cleveland President, Harker, expressed opposition to further rate cuts, citing persistent inflation risks and a lack of compelling reasons for additional policy actions [5] - The Bank of England maintained its interest rate at 4%, but indicated that rate cuts may be forthcoming as inflation is expected to peak and stabilize slightly above 2% in the next two years [6] Company News - Google announced the upcoming launch of its most powerful AI chip, Ironwood, which is expected to be four times faster than its predecessor and is aimed at AI companies [7][8] - Former President Trump announced agreements with pharmaceutical companies Eli Lilly and Novo Nordisk to reduce the prices of popular weight loss drugs, with prices for some medications dropping by approximately $50 [9] - UBS adjusted its price targets for Arm from $200 to $195 and Qualcomm from $175 to $185 [10]

Core Insights - Stocks fell on Thursday as Wall Street focused on corporate earnings [2] Qualcomm - Qualcomm's stock fell 4.76% after reporting fiscal fourth-quarter adjusted earnings of $3 per share on revenue of $11.27 billion, which exceeded expectations. The company anticipates fiscal first-quarter adjusted profit between $3.30 and $3.50 per share, with revenue projected between $11.8 billion and $12.6 billion, surpassing consensus estimates [3][5] AppLovin - AppLovin's stock rose 2.47% after reporting third-quarter earnings of $2.45 per share, beating estimates by 7 cents. The company's ad revenue reached $1.41 billion, exceeding expectations of $1.34 billion and marking a 68% increase year-over-year. For the fourth quarter, AppLovin expects revenue between $1.57 billion and $1.6 billion, higher than the $1.55 billion estimate [4] Arm Holdings - Arm Holdings' stock fell 2.54% despite reporting fiscal second-quarter earnings that surpassed analyst forecasts. The company expects adjusted profit of 41 cents per share on revenue of $1.23 billion for the current third quarter, exceeding Wall Street's expectations of 35 cents per share and $1.11 billion in revenue [6] Marvell Technology - Marvell Technology's stock rose 0.96% after reports that SoftBank Group explored a potential takeover of the chip company. The acquisition was intended to merge Marvell with Arm, but no agreement was reached [7] Tesla - Tesla's stock declined 4.94% as shareholders prepared for a vote on CEO Elon Musk's pay package during the annual meeting. The vote is expected to pass, although Norway's sovereign-wealth fund has publicly stated it will vote against Musk's compensation [7] Moderna - Moderna's stock gained 4.2% after reporting better-than-expected quarterly results, with a loss of 51 cents per share, which was narrower than the anticipated loss of $2.12. Revenue for the quarter was $1.02 billion, exceeding the $880 million estimate [8] DuPont - DuPont's stock rose 0.2% after the company reduced its full-year net sales forecast to $6.84 billion from $6.865 billion. The board authorized $2 billion in stock repurchases and declared a quarterly dividend of 20 cents per share [9] Airlines - Delta Air Lines, United Airlines, and American Airlines saw declines of 0.7%, 1.6%, and 1.4%, respectively, due to a 10% reduction in flight capacity at major U.S. airports amid a government shutdown affecting air-traffic controllers [10] Robinhood Markets - Robinhood's stock fell 7.7% despite reporting third-quarter earnings and revenue above analysts' expectations. However, transaction-based revenue of $730 million, a 129% increase year-over-year, missed projections [11] Snap - Snap's stock surged 16% after narrowing its third-quarter loss and announcing a $400 million deal with AI company Perplexity to integrate its technology into Snapchat. Revenue rose 10% to $1.51 billion, surpassing estimates [12] Datadog - Datadog's stock surged 19% after reporting third-quarter adjusted earnings of 55 cents per share, exceeding estimates of 45 cents. Revenue climbed 28% to $886 million, beating forecasts of $854 million [13] Celsius Holdings - Celsius Holdings' stock sank 23% due to concerns over the transition of its newly acquired Alani Nu business into PepsiCo's distribution network, which may impact inventory movements [14] CarMax - CarMax's stock tumbled 13% after announcing the departure of its CEO, Bill Nash, effective December 1. The board member David McCreight will serve as interim president and CEO while a search for a permanent replacement is conducted [14] DoorDash - DoorDash's stock declined 16% after missing third-quarter earnings expectations and announcing plans to invest several hundred million dollars more in new initiatives and platform development in 2026 compared to 2025 [15] Duolingo - Duolingo's stock plummeted 27% after forecasting fourth-quarter bookings of $329.5 million to $335.5 million, falling short of Wall Street estimates [15] E.l.f. Beauty - E.l.f. Beauty's stock sank 32% after issuing full-year guidance below Wall Street expectations, projecting adjusted earnings of $2.80 to $2.85 per share on sales of $1.55 billion to $1.57 billion, while analysts forecasted adjusted earnings of $3.53 on revenue of $1.65 billion [16]