Market Overview - Major U.S. indices rose, with the Dow Jones up 225.76 points (0.48%) closing at 47,311 points, Nasdaq up 151.16 points (0.65%) at 23,499.8 points, and S&P 500 up 24.74 points (0.37%) at 6,796.29 points [1] - European indices also saw gains, with Germany's DAX30 up 102.18 points (0.43%) at 24,047.82 points, and the UK's FTSE 100 up 61.29 points (0.63%) at 9,776.25 points [2] Employment Data - The ADP report indicated an increase of 42,000 jobs in October, surpassing the Dow Jones estimate of 22,000 jobs, while September's data was revised to a loss of 29,000 jobs [5] - The ISM reported that the non-manufacturing PMI rose from 50.0 in September to 52.4 in October, indicating a recovery in service sector activity, although employment remains weak with the employment index at 48.2 [6] Commodity Prices - Crude oil prices fell, with light crude down $0.96 to $59.60 per barrel (1.59% drop) and Brent crude down $0.92 to $63.52 per barrel (1.43% drop) [2] - Gold prices increased by over 1%, reaching $3,979.05 [4] Company News - Google will assist Apple in running Siri, with Apple expected to pay approximately $1 billion annually for Google's AI technology [9] - ARM Holdings reported Q3 revenue of $1.135 billion, a 34% year-over-year increase, with adjusted EPS of $0.22 compared to $0.10 last year [9] - Qualcomm's Q4 revenue for fiscal year 2025 was $11.27 billion, a 10% increase year-over-year, despite a net loss of $3.117 billion due to a one-time tax expense [10]

Market Overview - The market is experiencing a rebound with the Dow up more than 300 points, S&P 500 up about 0.7%, and NASDAQ rallying about 1% [2][50] - Trade-sensitive stocks, including automakers and apparel retailers, are seeing gains following Supreme Court hearings regarding President Trump's tariff policies [2][10] Supreme Court Hearing on Tariffs - The Supreme Court justices, including Chief Justice John Roberts, expressed skepticism towards the Trump administration's legal arguments for tariffs, suggesting they may be viewed as taxes on Americans [6][7][10] - The questioning from both liberal and conservative justices indicates a potential challenge to the legality of Trump's blanket tariffs, which could impact market expectations [5][10][13] Labor Market and Federal Reserve Policy - ADP reported a surprising addition of 42,000 jobs in October, reversing a decline from September, which may influence Federal Reserve policy discussions [14] - Fed Governor Steven Myron indicated that the labor market poses a greater risk than inflation, suggesting a more cautious approach to monetary policy [15][16] AI and Technology Sector Insights - Concerns are emerging regarding AI valuations, with analysts cautious about the sustainability of current business models and potential market corrections [20][21][22] - Companies are underweight in AI-related stocks, favoring investments in European markets due to attractive valuations [23][24] Scott's Miracle Grow Performance - Scott's Miracle Grow reported a decrease in net sales but improved gross margins and market share, indicating a recovery phase [28][30] - The lawn and garden sector is described as recession-resistant, with strong consumer demand and growth in DIY projects [33][34] Qualcomm's Financial Results - Qualcomm's Q4 results showed earnings per share of $3, beating expectations, with revenue at $11.27 billion, also above estimates [54][57] - The company is diversifying into automotive and IoT markets, with a focus on AI chip development to enhance growth potential [59][66] Robinhood's Earnings Report - Robinhood's Q3 earnings showed a beat on both top and bottom lines, with significant net deposit growth, although initial stock reactions were negative due to high expectations [83][88] - The company is exploring opportunities in prediction markets, which could diversify revenue streams and enhance long-term growth potential [90][92] ARM Holdings Performance - ARM reported earnings per share of 39 cents, beating estimates, with revenue of $1.14 billion, also exceeding expectations [70][72] - The company is well-positioned in the chip industry, with strong demand for its designs across various markets, including data centers and IoT [79][80]

Financial Highlights - Total revenue reached $1135 million, a 34% year-over-year increase[11, 24] - Royalty revenue grew to $620 million, up 21% year-over-year, driven by Arm technology adoption and increased usage in data centers[24] - License and other revenue increased significantly to $515 million, a 56% year-over-year increase, due to the timing of high-value license agreements[24] - Non-GAAP operating income was $467 million, resulting in a non-GAAP operating margin of 41%[44] - Trailing twelve months Non-GAAP free cash flow was $1073 million[11] Market and Technology Trends - Arm forecasts its market share with top hyperscalers will approach 50% in 2025[13] - The cumulative number of Arm-based chips shipped since 1990 exceeds 325 billion[12] - Armv9 architecture adoption is driving royalty growth, commanding higher royalties per chip compared to previous architectures[25, 28] - Semiconductor industry revenue is forecasted to grow at a CAGR of 8%[17] Compute Subsystems (CSS) - Arm signed another three CSS licenses in the quarter, for chips used in smartphones, PCs, and AI data centers[14] - CSS substantially increases Arm's royalty revenue per chip[41]

Core Insights - Arm Holdings Plc. reported strong second-quarter earnings, surpassing both revenue and earnings estimates, leading to a positive stock movement [1][2]. Financial Performance - Quarterly earnings were reported at 39 cents per share, exceeding the consensus estimate of 33 cents [2]. - Revenue for the quarter reached $1.13 billion, beating the analyst consensus estimate of $1.06 billion and showing a significant increase from $844 million in the same period last year [2]. - Royalty revenue grew by 21% year-over-year to $620 million [5]. - Licensing and other revenue increased by 56% year-over-year to $515 million [5]. - Annualized contract value (ACV) rose by 28% year-over-year to $1.6 billion [5]. Stock Performance - Following the earnings report, Arm Holdings stock rose by 4.41%, reaching a price of $167.25 in extended trading [3].

SAN FRANCISCO (Reuters) -Chip technology provider Arm Holdings (ARM) gave a fiscal third-quarter forecast on Wednesday that topped Wall Street's expectations, boosted by the boom in artificial intelligence computing. Shares of Arm ​rallied 6% in premarket trading on Thursday as investors digested the surprise outlook. For the current fiscal quarter, Arm ‌forecast revenue of $1.23 billion at the midpoint of its guidance, which exceeded the average analyst estimate of $1.1 billion, according to LSEG data. ...

Core Insights - Arm Holdings, a chip technology provider, has issued a fiscal third-quarter forecast that exceeds Wall Street's expectations, driven by the surge in artificial intelligence computing [1] Company Summary - The fiscal third-quarter forecast from Arm Holdings indicates strong performance, attributed to the increasing demand for AI computing solutions [1]

Financial Performance - Total revenue for the three months ended September 30, 2025, was $1,135 million, a 34.4% increase from $844 million in the same period of 2024[13]. - Net income for the three months ended September 30, 2025, was $238 million, compared to $107 million for the same period in 2024, representing a 122.4% increase[13]. - Operating income for the three months ended September 30, 2025, was $163 million, compared to $64 million in the same period of 2024, a 154.7% increase[13]. - The company reported a total comprehensive income of $220 million for the three months ended September 30, 2025, compared to $146 million for the same period in 2024, a 50.7% increase[16]. - Net income for the six months ended September 30, 2025, was $368 million, compared to $330 million for the same period in 2024, representing an increase of approximately 11.5%[31]. - The company's net income for the six months ended September 30, 2025, was $368 million, compared to $330 million for the same period in 2024, reflecting an increase of 11.5%[168]. - The basic net income per share for the three months ended September 30, 2025, was $0.22, up from $0.10 in 2024, indicating a 120% increase[12]. Revenue Breakdown - License and Other Revenue for the three months ended September 30, 2025, was $515 million, compared to $330 million in 2024, reflecting a year-over-year increase of 56.1%[62]. - Royalty Revenue for the three months ended September 30, 2025, reached $620 million, up from $514 million in 2024, marking a growth of 20.6%[62]. - Revenue from the United States for the three months ended September 30, 2025, was $374 million, compared to $292 million in 2024, indicating a growth of 28.1%[62]. - Revenue from the People's Republic of China (PRC) for the three months ended September 30, 2025, was $250 million, an increase from $193 million in 2024, representing a growth of 29.5%[62]. - Revenue recognized from previously satisfied performance obligations for the three months ended September 30, 2025, was $620.9 million, compared to $516.5 million for the same period in 2024[67]. - Revenue from the intellectual property license agreement with Arm China for the three months ended September 30, 2025, was $243.1 million, compared to $147.7 million in 2024, reflecting a 64.6% increase[151]. - For the six months ended September 30, 2025, the company recognized revenue of $444.1 million from Arm China, up from $270.3 million in 2024, a 64.3% increase[151]. - Revenue from licensing and servicing arrangements with an affiliate of SoftBank Group for the three months ended September 30, 2025, was $177.9 million, compared to $43.2 million in 2024, a significant increase of 311%[156]. Expenses and Costs - Research and development expenses for the six months ended September 30, 2025, were $1,341 million, up from $999 million in the same period of 2024, indicating a 34.3% increase[13]. - The company reported a significant increase in staff costs, with salaries, bonuses, and benefits rising to $409 million for the three months ended September 30, 2025, compared to $327 million in 2024[168]. - The company's operating costs and expenses for the three months ended September 30, 2025, totaled $972 million, compared to $780 million in the same period of 2024[168]. - Share-based compensation costs increased to $506 million for the six months ended September 30, 2025, compared to $400 million for the same period in 2024, reflecting a rise of 26.5%[31]. - For the three months ended September 30, 2025, the pre-tax share-based compensation cost was $265 million, an increase from $218 million in the same period of 2024[140]. Cash and Assets - Cash and cash equivalents as of September 30, 2025, were $2,518 million, an increase from $2,085 million as of March 31, 2025[19]. - Total assets increased to $9,710 million as of September 30, 2025, compared to $8,932 million as of March 31, 2025, reflecting a growth of 8.7%[19]. - Total shareholders' equity rose to $7,407 million as of September 30, 2025, compared to $6,839 million as of March 31, 2025, marking an increase of 8.3%[22]. - Cash provided by operating activities for the six months ended September 30, 2025, was $899 million, a significant improvement compared to a cash outflow of $284 million in the same period of 2024[31]. - Cash and cash equivalents at the end of the period on September 30, 2025, were $2,518 million, compared to $1,498 million at the end of September 30, 2024, marking a year-over-year increase of 68.1%[31]. Investments and Acquisitions - The company entered into an agreement to acquire DreamBig Semiconductor, Inc. for approximately $265 million in cash, expected to close by the end of Q4 FY 2026[169]. - The company recognized a pre-tax gain of $131.0 million from the divestiture of its Artisan foundation IP business[74]. - The company expects to receive approximately $140 million in gross proceeds from its equity interest in Ampere, following SoftBank Group's acquisition[82]. - The company continues to evaluate opportunities for investments and technical partnerships to develop new technologies and advanced products, particularly in AI[194]. - The company plans to allocate greater financial resources towards technology development and explore investment or acquisition opportunities[195]. Market and Strategic Focus - The company is focused on maintaining and growing its market share in high-growth areas such as AI, which is driving demand for advanced processor designs[181]. - The Bureau of Industry and Security (BIS) extended U.S. export controls on the semiconductor industry, which may impact the company's ability to license products to certain countries[185]. - The "Affiliates Rule" published by BIS on September 29, 2025, expands export-related restrictions to foreign entities owned 50% or more by entities on the Entity List[187]. - The company relies on Arm China for a significant portion of its revenue, with payments determined by financial information provided by Arm China[184]. Financial Instruments and Risks - The company experienced a foreign currency translation adjustment loss of $4 million for the three months ended September 30, 2025, compared to a gain of $25 million in the same period of 2024[16]. - The company reported a net loss of $9 million on cash flow hedge derivatives for the three months ended September 30, 2025, compared to a gain of $29 million for the same period in 2024[104]. - The allowance for current expected credit losses decreased from $20 million as of March 31, 2025, to $3 million as of September 30, 2025[92]. - The notional value of outstanding foreign currency forward contracts designated as cash flow hedges was £315 million as of September 30, 2025, with a fair value of $7.2 million[100]. Accounting and Compliance - The company is currently evaluating the impact of several recently issued accounting standards, including ASU 2023-09, which will require additional disclosures in the financial statements for the fiscal year ending March 31, 2026[45]. - Adjustments to revenue are made in subsequent periods to reflect changes in estimates based on actual amounts reported by licensees[207]. - The company uses judgment for key attributes including the percentage of markets using its products and average selling price[207].

Earnings Reports Overview - A busy earnings week begins on Wednesday with notable companies such as Novo Nordisk A/S and McDonald's Corporation reporting pre-market [1] - Technology and semiconductor companies including Applovin Corporation, QUALCOMM Incorporated, and Arm Holdings plc are scheduled to report after market close on the same day [1] - Thursday will feature earnings from AstraZeneca PLC and ConocoPhillips pre-market, while Friday will highlight reports from Constellation Energy Corporation, KKR & Co. Inc., and Enbridge Inc, focusing on utilities and financial sectors [1] - The following Monday and Tuesday are expected to have fewer major market movers, indicating a potential slowdown in earnings announcements [1]

Core Insights - SoftBank Group's shares fell by 10% in Japan, reflecting broader concerns over inflated valuations in AI-related stocks, resulting in a loss of approximately $13 billion from CEO Masayoshi Son's net worth [1][2]. Group 1: Market Trends - The decline in SoftBank's stock is part of a larger trend affecting AI-linked companies, with investors expressing apprehension about inflated valuations in the market's most popular trade [2]. - On a single day, the AI market experienced a significant downturn, erasing over $500 billion in market value, despite strong earnings from Palantir Technologies [4]. Group 2: Company Performance - SoftBank Group holds a majority stake in Arm Holdings, which saw its shares drop by 4.71% amid market concerns [3]. - Samsung Electronics and SK Hynix also experienced declines in their shares, with decreases of 4.1% and 1.19%, respectively [3]. Group 3: Industry Reactions - CEO Alex Karp of Palantir criticized short-sellers for betting against profitable companies in the AI sector, arguing that it is illogical to bet against firms driving the industry [5]. - Industry experts, such as Dan Ives from Wedbush, dismissed warnings from short-sellers as misinterpretations of the long-term direction of companies in the AI space [6].

The chip designer is generating higher royalty rates and is making progress in the cloud-server processor market. ...