ARM Holdings stock is showing exceptional strength. Why are ARM shares rallying?
Arm Posts Record Q1Arm earned 45 cents per share in the three months ended June, beating the 40 cent consensus by 12.5% while total revenue of $1.29 billion edged past the $1.26 billion the Street had been modeling.The standout number inside the report was data center royalties, which more than doubled from the same period a year ago and helped push total royalty revenue up 22% to $715 million, a figure that captures how thoroughly cloud operators have embraced computing built on Arm’s architecture.CEO Rene Haas described the period as a record first quarter and attributed the performance to deepening penetration of the Arm platform across cloud infrastructure, connected devices and an expanding set of physical world AI applications.Q2 Guidance Comes in Above EstimatesFor the second quarter, Arm guided adjusted earnings per share to a range of 43 cents to 51 cents, versus the 43 cent analyst estimate with a midpoint that sits meaningfully above what the Street had penciled in.Revenue guidance of $1.33 billion to $1.48 billion also straddles the $1.34 billion consensus with the top end implying a step up in growth that would suggest the momentum from the first quarter is carrying forward.Current Setup and Indicators for ARMEven with Thursday’s bounce, the intermediate setup is still choppy. The stock is 15.9% below the 20‑day SMA and 26.9% below the 50‑day SMA, while sitting 4.1% under the 100‑day SMA. Zoom out and the longer trend remains intact since Arm is still about 25% above the 200‑day SMA, a reminder that the broader uptrend is bruised but not broken.Momentum hasn’t turned yet. MACD is below its signal line and the histogram is negative, which shows upside pressure fading compared with the prior upswing. That tells the market rallies can still happen, but they need real follow‑through because buyers have to rebuild momentum instead of relying on strength from the sector.The moving‑average structure is mixed. The 20‑day SMA is below the 50‑day, which is bearish in the near term, while the 50‑day remains above the 200‑day after the April golden cross, which keeps the longer‑term backdrop constructive. The June swing high and May swing low frame the current move as a rebound inside a wider range, more work in progress than clean breakout.
