Arm Slumps 6%, Pressured by Weak Smartphone Royalty Forecast

Arm Holdings (ARM) shares dropped over 6% in after-hours trading on July 29.

The company reported first-quarter revenue of $1.29 billion. Adjusted earnings reached $0.45 per share. Both figures exceeded analyst expectations.

Surging demand for AI data center technology drove the quarterly performance. Arm projected second-quarter revenue of $1.38 billion, surpassing Wall Street estimates.

However, management warned of slowing royalty growth in the smartphone market. Investors sold off shares as traditional market deceleration overshadowed strong AI expansion.