Arm Holdings (ARM) Drops 13% on Disappointing Q2

We recently published Massive Sell-Off: 10 Stocks in a Bloodbath. Arm Holdings plc (NASDAQ:ARM) is one of the worst-performing stocks on Thursday.

Arm Holdings fell for a third straight day on Thursday, shedding 13.44 percent to close at $141.38 each as investors soured on its dismal earnings performance in the first quarter of fiscal year 2026.

In its earnings release, Arm Holdings plc (NASDAQ:ARM) said net income during the period declined by 42 percent to $130 million from $223 million in the same period last year. Total revenues, however, were higher by 12 percent at $1.05 billion versus $939 million.

Heading into the second quarter, Arm Holdings plc (NASDAQ:ARM) is targeting to hit a range of $1.01 billion to $1.11 billion in revenues, which could translate to a 19.67 percent to 31.5 percent jump from the $844 million registered in the same period last year.

“Arm is powering AI workloads everywhere with unmatched performance and energy efficiency,” Arm Holdings plc (NASDAQ:ARM) CEO Rene Haas said.

“Our Q1 FYE26 results exceeded $1 billion in revenue for the second straight quarter as royalties grew across all target end markets, demonstrating the strength of Arm as the AI platform of choice—from the cloud to the smallest edge devices,” he noted.