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Arm Lowers Full-Year Forecast, Shares Fall 6%

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Arm Holdings has revised its full-year revenue guidance downward, announcing that it will no longer meet the top end of its previous forecast. The chip technology provider, which has benefitted from the AI boom, reported a slight miss on its broader revenue expectations, sending its shares down by about 6% in extended trading.

Arm narrowed its revenue guidance for the full year to a range of $3.94 billion to $4.04 billion, down from the previous range of $3.8 billion to $4.1 billion. The company also adjusted its earnings per share forecast. Despite this, the company surpassed Wall Street’s expectations for the current quarter, with a forecast of $1.23 billion in revenue for the fiscal fourth quarter, compared to an analyst estimate of $1.22 billion.

CEO Rene Haas explained that the downward revision was due to the company being near the end of its fiscal year, providing more visibility on its final figures. Investors had been hoping for a more optimistic outlook, particularly with Arm’s technology being adopted for AI server chips and the increasing use of its higher royalty rate Armv9 design for smartphones.

Arm’s third-quarter revenue rose by 19% to $983 million, exceeding analysts’ expectations. The company continues to benefit from its widespread use in smartphones, including Apple’s latest iPhone, where its Armv9 chips are used. However, Arm faces challenges as it attempts to compete with its largest customers by raising prices and increasing royalties. Recently, the company encountered a setback in its attempt to secure higher royalties from Qualcomm, with the dispute culminating in a court case.

Arm’s participation in the U.S. government’s $500-billion AI infrastructure venture, Stargate, highlights its significance in the AI space. However, the company’s strained relationship with major customers like Qualcomm remains a challenge as it seeks to grow in new markets such as data centers.

 

Wolfspeed Exceeds Q2 Revenue Expectations Amid Operational Shifts

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Wolfspeed (WOLF.N) outperformed Wall Street expectations for second-quarter revenue and reported a smaller-than-anticipated net loss, demonstrating progress as the company implements changes to enhance profitability.

In the first quarter of 2025, Wolfspeed shut down some facilities and transitioned its device business to a 200-millimeter silicon carbide fab. This move aims to improve product efficiency and increase production capacity, especially in response to the growing demand for chips utilizing silicon carbide technology. These chips are critical for high-power applications such as electric vehicle powertrains, e-mobility, renewable energy systems, battery storage, and AI data centers.

For Q2, Wolfspeed reported revenue of $180.5 million, slightly exceeding the average analyst estimate of $179.9 million. The company’s net loss per share was 95 cents, better than the expected loss of $1.02 per share. The Mohawk Valley Fab facility contributed around $52 million in revenue.

Despite weak demand from automotive clients, Wolfspeed made leadership changes in November, replacing CEO Gregg Lowe with Thomas Werner, who took on the role of executive chairman as the company searches for a permanent CEO.

Looking ahead, Wolfspeed projects third-quarter revenue from continuing operations to range from $170 million to $200 million, with the midpoint falling short of analysts’ expectations of $193.6 million. The company anticipates an adjusted quarterly loss per share between 88 cents and 76 cents, compared to estimates of a loss of 86 cents. It also expects restructuring-related costs of $72 million for the third quarter.