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ARM Holdings, plc (ARMH)

- NASDAQ
  • Today, 6:16 AM
    • ARM Holdings (NASDAQ:ARMH): Q1 EPS of £0.07 in-line.
    • Revenue of $348.2M (+14.1% Y/Y) beats by $6.48M.
    • Shares +5.7% PM.
    • Press Release
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  • Wed, Mar. 25, 12:03 PM
    • Chip stocks are particularly hard-hit  (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
    • AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
    • Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
    • Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
    • TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 19 Comments
  • Wed, Feb. 18, 1:35 PM
    • Fresh off acquiring IBM's x86 server unit, Lenovo (OTCPK:LNVGY) plans to create an ARM (NASDAQ:ARMH) server prototype for its IBM-developed NeXtScale high-density server line (used in scale-out data centers running Web/cloud, HPC, and analytics workloads). The effort is part of a collaboration with a U.K. HPC R&D lab.
    • Lenovo's server will run on Cavium's (NASDAQ:CAVM) ThunderX ARM server CPU line, which supports up to 48 cores per chip and clock speeds of up to 2.5GHz. Lenovo asserts 12 of its ARM servers will support up to 1,152 CPU cores and occupy a modest 6U of rack space.
    • The deal gives Cavium a high-profile client as it battles against AppliedMicro, AMD, Qualcomm, and others in the budding ARM server CPU market. Cavium has tried to differentiate itself from rivals in part by creating ThunderX CPUs optimized for storage, networking, and security appliances, as well as by providing high levels of I/O bandwidth. Shares have made new highs.
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  • Wed, Feb. 11, 4:29 AM
    • "License revenue momentum has continued throughout the year," said ARM Holdings' (NASDAQ:ARMH) CFO Tim Score, as the company posted strong Q4 results.
    • With processor royalty revenue up 16% Y/Y, net profit came in at £72.8M ($111M), compared to a loss of £6.2M a year earlier.
    • The semiconductor giant also said it expects revenue to be up 10% Y/Y in Q1, reflecting revenue stemming from robust sales of Apple's iPhone 6.
    • ARMH +3.5% premarket
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  • Wed, Jan. 21, 12:12 PM
    • Citi's Amit Harchandani has upgraded ARM (ARMH +1.9%) ahead of its Feb. 11 Q4 report, and upped his target by £3.50 to £12 (shares currently go for £10.43 in London).
    • Harchandani thinks ARM's CPU cores will maintain a 75%+ tablet share and a 90%+ smartphone share in the face of Intel's efforts to gain ground, and forecasts a ~33% free cash flow CAGR from 2014-2017. He also sees room for ARM to "optimize the balance sheet and enhance capital allocation."
    • ARM, long afforded steep multiples on account of its near-monopoly position in the CPU core IP space, currently trades for 33x 2015E EPS. The 2015 revenue growth consensus is at 16.9%.
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  • Tue, Jan. 6, 1:36 PM
    • Up 30% in 2014, the Philadelphia Semi Index (SOXX -2.2%) has fallen over 4% thus far in 2015. Today's decline comes as the Nasdaq drops 1.6%.
    • Many names are posting 3%+ losses. SWKS -4.2%. QRVO -5.8%. AMAT -3.4%. KLAC -3.1%. SYNA -5.4%. IPHI -9%. ARMH -5.4%. SIMO -4.5%. MCRL -3.9%. AMCC -3.9%. CODE -5.1%. CY -4.6%. QUIK -7.9%.
    • This morning, Gartner estimated global chip sales rose 7.9% in 2014 to $339.8B, a little less than the 9.4% recently estimated by IHS. Sell-side firms have forecast industry growth will fall to the ~5% range in 2015.
    • Gartner thinks memory sales rose 16.9%, fueled by a 31.7% increase in DRAM sales. All other chip markets rose by 5.4%, a marked improvement from 2013's 0.8%. Intel (15% share) and Samsung (10.4%) claimed over a quarter of industry sales between them. Qualcomm (5.6%), Micron (4.9%), and SK Hynix (4.7%) rounded out the top-5.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 3 Comments
  • Dec. 3, 2014, 1:48 PM
    • The Philadelphia Semi Index (SOXX +1.7%) is making fresh highs after Microchip (MCHP +4.1%) slightly upped its calendar Q4 guidance, and stated it continues to "see an improvement in our bookings and billings since our earnings call on October 30, 2014."
    • Chip stocks had also jumped following that earnings call, during which Microchip said it believed the inventory correction that triggered an Oct. 9 warning (and a major chip stock selloff) was mostly over. While a slew of chipmakers provided soft Q4 guidance after Microchip's warning, fears of a major correction didn't pan out.
    • The group outperformed a bit yesterday after Cypress (CY +2.9%) announced it's merging with Spansion (CODE +2.5%), continuing the chip industry's consolidation wave. Several firms have upgraded Cypress and/or Spansion in response, praising the deal's cost synergies.
    • Notable gainers include not only chipmakers, but also chip equipment, test/assembly, and IP licensing firms: ARMH +3.8%. AMBA +3%. MX +9%. MXIM +4.2%. AMCC +3.5%. ADI +3.1%. SIMG +3.7%. AMKR +4.2%. SPIL +3.3%. SYNA +2.7%. ATML +3.7%. ENTR +3.8%. AMAT +2.7%. KLAC +2.5%.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Last week: Chip stocks rally after ADI's earnings
    | 10 Comments
  • Oct. 31, 2014, 11:31 AM
    • Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
    • Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
    • On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
    • Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
    • Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
    • Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | 17 Comments
  • Oct. 21, 2014, 9:14 AM
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  • Oct. 21, 2014, 5:57 AM
    • ARM Holding's (NASDAQ:ARMH) Q4 guidance is "underwhelming," SocGen says, given previous expectations of a strong H2.
    • The drop in value per new license sold implies that most of ARM's larger deals have been completed, firm says.
    • Any positive aura from Apple's iPhone strength is "more than offset" by ARM's weakness in the broader smartphone market.
    • SocGen maintains Sell rating with implied 18% downside.
    • Shares -3.7% in London.
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  • Sep. 30, 2014, 11:14 AM
    • Bernstein has downgraded ARM (ARMH -1.7%) to Underperform. The firm thinks forward estimates are too optimistic.
    • After entering the year trading at steep multiples, ARM has underperformed the Nasdaq by a large margin; shares now trade at 29x 2015E EPS. Investors have historically granted ARM a premium on account of its near-monopoly position in the CPU core IP space.
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  • Jul. 22, 2014, 5:38 AM
    • ARM (NASDAQ:ARMH) has announced a large increase in Q2 profit due to heavy growth from higher chip shipments and licensing revenue.
    • Net income climbed to £55.5M ($94.8M) from £10.5 Y/Y.
    • Revenue rose 9% to £187.1M ($319.6M). ARM's revenue often trails the market since half of its business comes from royalties. It earns the royalties and licensing fees from chip manufacturers on every chip shipped.
    • The company raised its interim dividend 20% to 2.52 pence per share.
    • ARMH +5.6% premarket
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  • Jun. 10, 2014, 12:02 PM
    • Canaccord's Matthew Ramsay has launched coverage of AppliedMicro (AMCC) with a Buy and $16 PT, and on fellow ARM (ARMH) server CPU play Cavium (CAVM) with a Buy and $62 PT.
    • Ramsay sees ARM designs grabbing 20% of a 2018 server CPU market he expects will be worth $19B (up from a current $12B).
    • Though software support and the dominance of Intel's x86 CPUs act as challenges, there's plenty of optimism about the ability of ARM designs to address demand for low-power CPUs for hyperscale deployments, as well as to cater to application-specific niches better than general-purpose Intel CPUs.
    • Cavium is going after the latter opportunity with its Project Thunder CPUs - Ramsay expects strong sales growth starting in 2H15. In the near-term, he expects a 50% 2013 increase in Cavium's core network processor design wins to drive 20%+ revenue growth.
    • As for AppliedMicro, he sees the early lead for the company's X-Gene ARM CPUs - parts have been sampling for nearly a year, and plenty of software testing has been done - allowing AppliedMicro to hit its target of doubling quarterly sales by the end of 2016.
    • Cavium recently unveiled ThunderX, a next-gen solution supporting up to 48 home-grown ARM cores (requires a costly architectural license) - chips meant specifically for networking, storage, and security hardware will be offered. AppliedMicro is prepping next-gen X-Gene CPUs supporting up to 16 cores.
    | 2 Comments
  • Apr. 30, 2014, 10:23 AM
    • A week after ARM (ARMH -2.1%) sold off in response to its Q1 results, Citi has downgraded the CPU core developer to Neutral.
    • While ARM's licensing growth remains strong (+37% Y/Y in Q1 and +27% in Q4), investors have been nervous about slowing royalty growth. Royalty revenue (based on the prior quarter's shipments) only rose 8% Y/Y and 7% in Q4, thanks in large part to slowing chip shipment growth (+11% and +16%).
    • Moreover, the numbers suggest ARM's royalty/chip is declining in spite of growing mobile adoption of technologies that boost its royalty rate, such as 64-bit instruction sets, big.LITTLE, and dual/quad-core CPUs. ARM suggests growing shipments of microcontrollers, smart sensors, and low-end smartphones are pressuring its royalty rates for now.
    • ARM, long granted steep multiples by the Street on account of its near-monopoly position in the CPU core licensing space, currently goes for 24x 2015E EPS.
    | 1 Comment
  • Apr. 17, 2014, 5:26 PM
    • After underperforming yesterday in response to a mixture of in-line and soft outlooks from Intel, ASML, and Linear, chip stocks bounced back strongly following more encouraging numbers from foundry giant TSMC, NAND flash giant SanDisk, and well-diversified Cypress.
    • TSMC, seen as a bellwether for chip demand due to a client list that includes most of the world's top fabless chipmakers (Qualcomm, Broadcom, MediaTek, Xilinx, etc.), beat Q1 estimates, issued strong Q2 guidance, and reported seeing healthy sales from mobile clients, and for its advanced 28nm process node.
    • SanDisk offered strong margin guidance to go with a Q1 beat. Cypress posted a slight Q1 revenue beat, and issued Q2 revenue guidance that beat consensus at the midpoint.
    • Notable gainers: ARMH +3.9%. MRVL +2.2%. CODE +5.1%. RMBS +4.4%. IDTI +3%. ENTR +3.7%. PXLW +6.1%. QUIK +2.4%.
    | 1 Comment
  • Apr. 8, 2014, 10:06 AM
    • ARM (ARMH +1.8%) has been upgraded to Market Perform by Bernstein.
    • Yelp (YELP +2.2%) has been upgraded to Buy by SunTrust, and cut to Neutral by UBS. Oppenheimer upgraded shares yesterday.
    • FireEye (FEYE +3.5%) has been upgraded to Outperform by Wedbush a day after FBN did the same.
    • Vipshop (VIPS +4.1%) has been upgraded to Outperform by Credit Suisse. Goldman upgraded shares last week.
    • KLA-Tencor (KLAC -0.7%) has been cut to Sector Perform by Pac Crest.
    • ON Semi (ONNN +2.9%) has been upgraded to Buy by MKM.
    • Web.com (WWWW +2%) has been upgraded to Buy by Craig-Hallum.
    • LivePerson (LPSN -5.1%) has been cut to Hold by Benchmark.
    • CACI (CACI +2.1%) has received a two-notch upgrade to Outperform from Raymond James. Shares were hit hard last week by an FY14 warning.
    • JinkoSolar (JKS +6.4%) has been started at Overweight by Barclays. The firm calls Jinko a vertically-integrated cost leader, and believes the solar up-cycle is still in its early stages.
    • Castlight Health (CSLT +1.3%) has received three bullish ratings and two neutral ones on underwriter coverage day.
    | 1 Comment
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Company Description
ARM Holdings PLC designs microprocessors, physical IP and related technology and software, and sells development tools to enhance the performance and energy-efficiency of high-volume embedded applications.