Arm stock dropped 10.6% in morning trading Tuesday after soaring 29% yesterday. The shares have soared 93% after its latest earnings.
Arm Holdings Plc soared again on Monday, extending a three-day rally that has driven its value up almost 100%, after a blockbuster earnings report last week showed artificial intelligence spending is bolstering sales.
The chip designer’s shares rose 29% on Monday to close at a record on volume that was more than 10 times the average over the past three months. The advance pushed the stock’s gains to more than 90% in the three trading sessions since Arm’s results were released after markets closed on Feb. 7.
“What you’re seeing here is a feeding frenzy for anything to do with AI,” said Dennis Dick, trader at Triple D Trading. “Algos are getting involved, retail traders are getting involved, people are buying options. All that is just snowballing.”
Arm is benefiting from a push beyond smartphone technology, helping fuel growth and profitability. Last week, the company projected revenue of $850 million to $900 million for the March quarter, far surpassing the average analyst estimate at $778 million. Chief Executive Officer Rene Haas said opportunities presented by AI are still in the early stages.