ARM Stock Price Forecast: Shares Approach Late-April Low Ahead of Earnings, Can Key $195 Support Hold?

TradingKey - Arm Holdings (ARM) will report its second-quarter fiscal 2027 financial results after the U.S. market close on November 4, and hold an earnings conference call at 5:00 p.m. Eastern Time. Market consensus estimates company revenue for the quarter at approximately $1.38 billion, up about 21% year-over-year, with adjusted earnings per share expected at $0.48, up roughly 23% year-over-year. This forecast aligns closely with Arm's previously provided guidance of $1.38 billion in revenue and $0.47 in earnings per share.

Ahead of the earnings release, although Arm's pre-market stock price rebounded 3% to near $209, the overall trend remains weak. The stock has pulled back over 50% from its interim peak of around $440 in June, approaching its lowest zone since late April once again. On one hand, investors are optimistic about Arm's long-term growth potential in AI data centers; on the other hand, concerns are growing over high valuation, cooling smartphone demand, and lower initial margins in new businesses.

In the previous quarter, Arm's revenue grew 22% year-over-year to a record high of $1.289 billion. Royalty revenue increased 22% to $715 million, while license and other revenue grew 23% to $574 million. Data center royalty revenue more than doubled year-over-year, reflecting the continued penetration of the Neoverse architecture in cloud computing and AI servers. The company also stated that customer demand for its AGI CPU in fiscal years 2027 and 2028 has exceeded $2 billion, significantly higher than the previously cited $1 billion opportunity pipeline.

However, Arm's growth is not without pressure. Rising memory prices are driving up smartphone manufacturing costs, which in turn affects end-device shipments and chip royalty revenues. The company had previously adjusted its full-year royalty revenue growth forecast from around 20% to the high-teens percentage range, and expects second-quarter royalty growth to potentially slow to the low-teens percentage range. Meanwhile, despite strong demand for AGI CPUs, the first-generation product's gross margin is expected to be only in the high-30% to low-40% range, significantly lower than traditional licensing business, meaning that revenue expansion may not necessarily translate into profit margin enhancement in tandem.

Source: TradingView

From a technical perspective, Arm's stock price remains below its 20-day moving average of $233.66 and 60-day moving average of $257.66, with both moving averages sloping downward, indicating that the medium-term bearish structure remains intact. Even if a post-earnings rebound occurs, the stock price needs to first reclaim $220 and further break through the $233 to $234 range to alleviate ongoing downward pressure. The $257 to $258 region where the 60-day moving average sits represents stronger resistance; only by consolidating above this level could the trend shift from a weak bounce to a medium-term recovery.

The 14-day RSI currently stands at approximately 35.42, slightly below the signal line of 36.16, nearing the oversold territory of 30. This indicator suggests that selling momentum has eased somewhat, but a clear bottom-reversal signal has yet to form. If the earnings report beats expectations and management raises the outlook for AI data centers, AGI CPUs, or the royalty business, an interim bottom could take shape near $195, with the stock price expected to attempt a rebound toward $220 and $234.

Conversely, if Arm's royalty growth, smartphone business, or next-quarter guidance fall short of expectations, the stock price may retest the support level at $195.61. This level serves as both a breakout platform from late April and a key low over the past six months; if breached on high daily volume, the technical structure would deteriorate further, with potential pullbacks toward the $180 to $185 region.