Arm's stock price surged again, with a single-day increase of 42%! Analysts: AI frenzy driving the growth

Arm's performance last week far exceeded expectations, stimulating a continuous rise in the company's stock price. On Monday, it soared as high as 42%, with trading volume more than four times the three-month average.

Data shows that since Arm announced its financial report after the market closed on February 7th, the stock's increase has expanded to 99% within three trading days. After the sharp rise of 42%, Arm's increase subsequently fell to 26%, closing at $114.79.

Analysts say that Arm's surge is still a result of the frenzy surrounding anything related to AI. Nvidia has experienced this phenomenon before, and now Arm is also being included in the same category. Analysts point out that Arm is not purely an AI company, but it does have an AI division, which is the driving factor behind the price surge. Therefore, the surge is entirely about the AI boom.

Previously, Wall Street News reported that Arm's revenue for the third quarter was $824 million, a year-on-year increase of 14%, higher than analysts' expectations of $760 million. Net profit was $87 million, with adjusted EPS of $0.29, surpassing analysts' expectations of $0.25. It is expected that the fourth-quarter revenue will reach $850-900 million, higher than the average analyst expectation of $778 million; adjusted EPS is expected to be $0.28-0.32, higher than analysts' expectation of $0.21. The full-year adjusted EPS is expected to be $1.20-1.24, exceeding analysts' expectation of $1.05. The strong performance led to a nearly 60% surge in Arm's stock price the day after the earnings report was released.

CEO René Haas stated last week that the opportunities brought by artificial intelligence are still in the early stages. However, the company's business in the previous quarter was supported by the surge in AI demand, and the company has shifted towards AI faster than expected. He mentioned that many of the latest Arm-based smartphone chips have built-in AI capabilities, and Arm-based circuits are part of some of Nvidia's most advanced AI systems. Nvidia is a leader in AI computing.