Arm Holdings plc American Depositary Shares

Arm Holdings shares dropped on Wednesday due to reports of China developing a prototype extreme ultraviolet lithography machine for advanced semiconductor chips, raising concerns about potential competition in AI and chip technology.

The Semiconductor IP Market is projected to grow from USD 8.48 Billion in 2025 to USD 17.88 Billion by 2033, driven by increasing demand in automotive, telecommunications, and consumer electronics sectors, with a CAGR of 9.77%.

November saw technology and AI stocks experience significant declines due to concerns about high valuations, with major indexes like Nasdaq experiencing a negative month after a strong Thanksgiving week recovery.

Arm Holdings reported strong Q2 fiscal 2026 earnings with 34% revenue growth, driven by AI demand. Despite impressive financial performance, the stock remains volatile due to macroeconomic uncertainties and limited visibility into future product strategies.

Arm Holdings, a key player in the AI theme, is set to report earnings on July 31. The company has consistently exceeded expectations, with strong royalty and licensing revenue. However, the recent broader weakness in AI stocks could weigh on Arm's post-earnings performance if the results don't impress the market. Meta Platforms, a partner of Arm,...