ARM Holdings PLC’s stock saw its worst daily performance on record, as shares plummeted by over 19% in Tuesday trading. This marks the largest single-day percentage loss for the company since going public again five months ago. Notably, ARM shares had not experienced a double-digit percentage decline in a single session before.
A Steep Decline Amid a Weak Market
While ARM’s stock almost doubled in value over the three sessions following the company’s earnings report last Wednesday, it took a hit on Tuesday due to a lackluster day for the broader market and technology stocks in general.
Market Value and Sector Comparison
Despite Tuesday’s plunge, ARM’s stock remains valuable, with a market capitalization just above $123 billion, essentially on par with well-known companies such as Boeing Co., Goldman Sachs Group Inc., United Parcel Service Inc., and AT&T Inc. Furthermore, within the chip sector, ARM is worth more than both Micron Technology Inc. and Analog Devices Inc., which each have market valuations near $90 billion.
Positive Financials Signal AI Interest
ARM surprised Wall Street with its financial results and guidance last week, indicating that the company is reaping benefits from the growing interest in artificial intelligence. Fueled by the explosive gains of Nvidia Corp.’s stock and other AI-related companies, investors have been eager to jump on board should ARM become the next hot AI-stock play. However, some analysts warn that the recent gains may have overshadowed the importance of valuation.
