The S&P 500 Index ($SPX) (SPY) Monday closed up +0.41%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.08%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.71%. June E-mini S&P futures (ESM25) are up +0.60%, and June E-mini Nasdaq futures (NQM25) are up +0.80%.
Stock indexes on Monday recovered from early losses and settled higher. Strength in chip stocks led the broader market higher on Monday. Also, energy producers rallied after the price of WTI crude rose more than +2% to a 1-1/2 week high. In addition, US steel and aluminum producers soared Monday after President Trump pledged to double tariffs on US steel and aluminum imports to 50% from 25%.
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Stocks on Monday initially moved lower due to an escalation of trade tensions between the US and China. On Monday, China's Ministry of Commerce accused the US of unilaterally introducing new discriminatory restrictions, including new guidelines on AI chip export controls, curbs on chip design software sales to China, and the revocation of Chinese student visas, and vowed to take measures to defend its interests. The latest flare-up threatens to worsen trade relations even after President Trump expressed hope he will speak with Chinese President Xi Jinping this week to accelerate a trade truce.
Economic concerns were also bearish for stocks after Monday's news showed US manufacturing activity last month unexpectedly contracted by the most in 6 months, and April construction spending unexpectedly declined. In addition, higher bond yields on Monday were bearish for stocks. The 10-year T-note yield Monday rose +6 bp to 4.46% as escalating trade tensions between the US and China led to a broad selloff of dollar assets, including Treasuries. Also, Monday's 2% jump in the price of WTI crude to a 1-1/2 week high has boosted inflation expectations, a hawkish factor for Fed policy.
The US May ISM manufacturing index unexpectedly fell -0.2 to 48.5, weaker than expectations of an increase to 49.5 and the steepest pace of expansion in 6 months.
US Apr construction spending unexpectedly fell -0.4% m/m, weaker than expectations of a +0.2% m/m increase.
Fed comments on Monday were mostly supportive of stocks and bonds. Fed Governor Waller said, "Assuming that the effective tariff rate settles close to my lower tariff scenario, that underlying inflation continues to make progress to our 2% goal, and that the labor market remains solid, I would be supporting good news rate cuts later this year." Also, Chicago Fed President Goolsbee said the Fed can proceed with interest rate cuts if uncertainty around trade policy is resolved. On the negative side, Dallas Fed President Logan said the Fed can afford to be patient before acting on interest rates as "both sides of our dual mandate appear fairly balanced."
The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on June 17-18.
The markets this week will focus on any new trade or tariff news. On Tuesday, Apr factory orders are expected to fall -3.2% m/m and the Apr JOLTS job openings report is expected to fall by -92,000 to 7.100 million. On Wednesday, the May ADP employment change is expected to climb by +110,000, and the May ISM services index is expected to rise +0.5 to 52.1. On Thursday, weekly initial unemployment claims are expected to fall by -5,000 to 235,000. On Friday, May nonfarm payrolls are expected to climb +125,000, and the May unemployment rate is expected to remain unchanged at 4.2%. Finally, May average hourly earnings are expected to rise +0.3% m/m and +3.7% y/y.
Overseas stock markets on Monday settled lower. The Euro Stoxx 50 fell to a 1-week low and closed down -0.21%. China's Shanghai Composite was closed today for the Dragon Boat Day holiday. Japan's Nikkei Stock 225 closed down -1.30%.
Interest Rates
September 10-year T-notes (ZNU25) Monday closed down -9 ticks. The 10-year T-note yield rose +6.2 bp to 4.462%. Sep T-notes on Monday were under pressure as escalating trade tensions between the US and China have led to a broad selloff of dollar assets, including Treasuries. Also, a negative carryover from weakness in European government bonds weighing on T-notes. In addition, today's 2% jump in the price of WTI crude to a 1-1/2 week high has boosted inflation expectations, a bearish factor for T-notes.
Losses in T-notes were limited due to dovish Fed comments after Fed Governor Waller laid out a scenario for the Fed to cut interest rates later this year, and Chicago Fed President Goolsbee said the Fed could proceed with interest rate cuts if uncertainty around trade policy is resolved. In addition, Monday's weaker-than-expected reports on May ISM manufacturing activity and Apr construction spending were bullish for T-notes.
European government bond yields on Monday finished higher. The 10-year German bund yield rose +2.4 bp to 2.524%. The 10-year UK gilt yield rose +2.1 bp to 4.667%.
The German May S&P manufacturing PMI was revised downward by -0.5 to 48.3 from the previously reported 48.8.
The UK May S&P manufacturing PMI was revised upward by 1.3 to 46.4 from the previously reported 45.1.
Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at Thursday's policy meeting.
US Stock Movers
Chip stocks moved higher Monday to lend support to the overall market. Micron Technology (MU) closed up more than +4%, and Advanced Micro Devices (AMD) and Microchip Technology (MCHP) closed up more than +3%. Also, Broadcom (AVGO) and Marvel Technology (MRVL) closed up more than +2%. In addition, Nvidia (NVDA), Lam Research (LRCX), ARM Holdings Plc (ARM), and ASML Holding NV (ASML) closed up more than +1%.
US steel and aluminum producers rallied Monday after President Trump said he would increase tariffs on US steel and aluminum imports to 50% from 25%. Cleveland-Cliffs (CLF) and Century Aluminum (CENX) closed up more than +20%. Also, Steel Dynamics (STLD) closed up more than +10% to lead gainers in the S&P 500. In addition, Nucor (NUE) closed up more than +10%, and Commercial Metals (CMC) closed up more than +5%.
Energy producers and energy service providers moved higher on Monday as the price of WTI crude climbed more than +2% to a 1-1/2 week high. Devon Energy (DVN), Diamondback Energy (FANG), and Haliburton (HAL) closed up more than +2%. Also, APA Corp (APA), ConocoPhillips (COP), Hess Corp (HES), and Occidental Petroleum (OXY) are up more than +1%.
Gold mining stocks rose Monday after the price of gold soared more than +2% to a 3-week high. Gold Fields Ltd (GFI) closed up more than +9%, and Anglogold Ashanti Plc (AU) closed up more than +7%. Also, Newmont (NEM) closed up more than +5%, and Freeport McMoRan (FCX) closed up more than +4%.
Zscaler (ZS) closed up more than +6% to lead gainers in the Nasdaq 100 after UBS raised its price target on the stock to $315 from $260.
Moderna (MRNA) closed up more than +1% after the FDA approved the company's new Covid vaccine for adults over 65 and anyone over 12 with at least one risk factor for severe disease.
Vera Therapeutics (VERA) closed up more than +66% after reporting the primary endpoint was met in a Phase 3 trial of its atacicept for the treatment of immunoglobulin A nephropathy.
Technology companies with the US government as a major client moved lower on Monday after The Wall Street Journal reported that funding cuts by the Trump administration have spread to technology contractors. As a result, Leidos Holdings (LDOS) closed down more than -4%, and CDW Corp (CDW) closed down more than -3% to lead losers in the Nasdaq 100. Also, Adobe (ADBE) and Dell Technologies (DELL) closed down more than -2%.
Automakers retreated Monday as President Trump's pledge to boost tariffs on US steel and aluminum imports to 50% from 25% threatens to cut into the companies' profits. Stellantis NV (STLA), General Motors (GM), and Ford Motor (F) closed down more than -3%.
Science Applications International (SAIC) closed down more than -13% after reporting Q1 EPS of $1.92, weaker than the consensus of $2.13.
Centene (CNC) closed down more than -3% after Barclays downgraded the stock to equal weight from overweight, citing concern about Medicare Part D and individual Affordable Care Act businesses.
Tesla (TSLA) closed down more than -1% after Tesla May new-vehicle registrations in France fell -57% y/y to an almost 3-year low.
JB Hunt Transport Services (JBHT) closed down more than -1% after Goldman Sach downgraded the stock to neutral from buy.
Earnings Reports (6/3/2025)
Crowdstrike Holdings Inc (CRWD), Dollar General Corp (DG), Donaldson Co Inc (DCI), Ferguson Enterprises Inc (FERG), Guidewire Software Inc (GWRE), Hewlett Packard Enterprise Co (HPE), Ollie's Bargain Outlet Holding (OLLI).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stock Indexes Rebound on Strength in Chip Makers and Energy Stocks

The S&P 500 Index ($SPX) (SPY) Friday closed down -0.01%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -0.11%. June E-mini S&P futures (ESM25) are down -0.10%, and June E-mini Nasdaq futures (NQM25) are down -0.16%.
Stock indexes on Friday settled mixed. Stocks saw early pressure Friday as concern about US trade policy weighs on market sentiment. Late Thursday, US Treasury Secretary Bessent said that trade talks with China were "a bit stalled" and that a call between President Trump and Chinese President Xi Jinping may be needed to reach a deal. Stocks sank to their lows Friday when President Trump accused China of violating an agreement with the US to ease tariffs. US Trade Representative Greer said that China is "slow-walking" approvals for export licenses for rare-earth materials and is in noncompliance with the agreement both countries made earlier this month.
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However, stock indexes recovered from early losses and traded mixed as short covering emerged Friday afternoon on hopes that trade tensions will ease with China after President Trump expressed confidence that the matter can be resolved when he said he'll "speak to President Xi and hopefully work it out." Also, Friday's decline in the 10-year T-note yield to a 3-week low was supportive for stocks.
US economic news on Friday was mainly supportive for stocks as Apr personal spending rose as expected and Apr personal income rose more than expected. Also, the Apr core PCE price index, the Fed's preferred inflation gauge, eased to its lowest level in more than 4 years, a dovish factor for Fed policy. In addition, US consumer sentiment was revised higher, and inflation expectations were revised lower.
US Apr personal spending rose +0.2% m/m, right on expectations. Apr personal income rose +0.8% m/m, stronger than expectations of +0.3% m/m and the biggest increase in 15 months.
The US Apr core PCE price index, the Fed's preferred inflation gauge, rose +0.1% m/m and +2.5% y/y, right on expectations. The +2.5% y/y report was the smallest year-on-year advance in more than 4 years.
The US May Chicago PMI unexpectedly fell -4.1 to 40.5, weaker than expectations of an increase to 45.0.
The University of Michigan US May consumer sentiment index was revised upward by +1.4 to 52.2, stronger than expectations of 51.5.
The University of Michigan US May 1-year inflation expectations indicator was revised lower to +6.6% from the previously reported +7.3%, weaker than expectations of +7.1%. Also, the May 5-10 year inflation expectations indicator was revised lower to +4.2%, weaker than expectations of no change at +4.6%.
Comments on Thursday evening from Dallas Fed President Logan signaled the Fed could keep interest rates unchanged in the medium term when she said it might be "quite some time" before Fed officials know how the economy will respond to tariffs and other policy changes and the Fed adjusts interest rates.
The markets are discounting the chances at 5% for a -25 bp rate cut at the next FOMC meeting on June 17-18.
Q1 earnings reporting season is winding down. So far, more than 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest percentage since Q2 of 2024. Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.
Overseas stock markets on Friday settled lower. The Euro Stoxx 50 closed down -0.08%. China's Shanghai Composite closed down -0.47%. Japan's Nikkei Stock 225 closed down -1.22%.
Interest Rates
June 10-year T-notes (ZNM25) Friday closed up +2.5 ticks. The 10-year T-note yield fell -0.8 bp to 4.420%. June T-notes on Friday climbed to a 3-week high and posted modest gains, and the 10-year T-note fell to a 3-week low of 4.385%. T-notes on Friday recovered from early losses and moved higher on the increase in safe-haven demand for government debt after US-China trade tensions escalated when President Trump accused China of violating the tariff agreement with the US. T-notes also have support after the US Apr core PCE price index, the Fed's preferred inflation gauge, posted its smallest year-on-year advance in more than four years, and after inflation expectations were revised lower, dovish factors for Fed policy.
Hawkish comments from Dallas Fed President Logan undercut T-note prices when she said it may be "quite some time" before the Fed adjusts interest rates. Also, concerns about rising wage pressures weighed on T-notes after Friday's news that US Apr personal income posted its largest increase in 15 months.
European government bond yields on Friday moved lower. The 10-year German bund yield fell to a 3-week low of 2.497% and finished down -0.8 bp at 2.500%. The 10-year UK gilt yield fell -0.2 bp to 4.647%.
Eurozone Apr M3 money supply rose +3.9% y/y, stronger than expectations of +3.7% y/y.
German Apr retail sales unexpectedly fell -1.1% m/m, weaker than expectations of a +0.2% m/m increase and the biggest decline in more than 1-1/2 years.
German May CPI (EU harmonized) rose +0.2% n/n and +2.1% y/y, stronger than expectations of +0.1% m/m and +2.0% y/y.
Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting.
US Stock Movers
Ulta Beauty (ULTA) closed up more than +11% to lead gainers in the S&P 500 after reporting Q1 EPS of $6.70, well above the consensus of $5.80 and raised its 2026 EPS forecast to $22.65-$23.20 from a previous estimate of $22.50-$22.90, stronger than the consensus of $22.95.
Zscaler (ZS) closed up more than +9% to lead gainers in the Nasdaq 100 after reporting Q3 revenue of $678.0 million, better than the consensus of $666.3 million, and raising its full-year revenue forecast to $2.66 billion from a previous forecast of $2.64 billion-$2.65 billion, above the consensus of $2.65 billion.
Palantir Technologies (PLTR) closed up more than +7 after the New York Times reported that President Trump is expanding the use of the company's technology platform to the IRS, HHS, and DHS.
Unity Software (U) closed up more than +9% after Jeffries upgraded the stock to buy from hold with a price target of $29.
Costco Wholesale (COST) closed up more than +3% after reporting Q3 EPS of $4.28, better than the consensus of $4.24.
Nordson (NDSN) closed up more than +1% after Oppenheimer upgraded the stock to outperform from market perform with a price target of $260.
Dexcom (DXCM) closed up more than +1% after Goldman Sachs initiated coverage on the stock with a buy recommendation and a price target of $104.
Marvell Technology (MRVL) closed down more than -5% to lead chip stocks lower after forecasting Q2 adjusted gross margin of 59% to 60%, with the midpoint slightly below the consensus of 59.6%. Also, Lam Research (LRCX) closed down -4%, and GlobalFoundries (GFS) and Intel (INTC) closed down more than -3%. In addition, Micron Technology (MU), Nvidia (NVDA), Advanced Micro Devices (AMD), ARM Holdings Plc (ARM), NXP Semiconductors NV (NXPI), ON Semiconductor (ON), KLA Corp (KLAC), and Qualcomm (QCOM) closed down more than -2%.
Regeneron Pharmaceuticals (REGN) closed down more than -19% to lead losers in the S&P 500 and Nasdaq 100 after its itepekimab, an experimental drug jointly developed with Sanofi for chronic obstructive pulmonary disease, showed disappointing results in late-stage trial.
Cooper Cos (COO) closed down more than -14% after cutting its full-year organic growth forecast to 5%-6% from a previous forecast of 6%-8%.
The Gap (GAP) closed down more than -20% after forecasting Q2 net sales about flat y/y and warning of a $250 million to $300 million hit to earnings should tariffs remain at current levels of 30% for most goods from China and 10% for other countries.
Elastic NV (ESTC) closed down more than -12% after forecasting 2026 revenue of $1.66 billion to $1.67 billion, below the consensus of $1.68 billion.
Eastman Chemical (EMN) closed down more than -3% after the Trump administration canceled a $375 million award to the company for a molecular recycling project in Texas.
Earnings Reports (6/2/2025)
Credo Technology Group Holding (CRDO), Science Applications International Corp (SAIC), The Campbell's Company (CPB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Settle Mixed on Trade Tensions and Positive Economic News

The S&P 500 Index ($SPX) (SPY) Tuesday closed up +2.05%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.78%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +2.39%. June E-mini S&P futures (ESM25) are up +2.11%, and June E-mini Nasdaq futures (NQM25) are up +2.36%.
Stock indexes rallied sharply on Tuesday after President Trump over the weekend extended the deadline for the European Union to face 50% tariffs until July 9 after threatening to impose a 50% tariff on US importers of EU goods starting June 1. Stocks also garnered support from Tuesday’s comments from National Economic Council Director Hasset, who said, “We’ll probably see a few more trade deals, even this week,” with India among the countries that are close to securing a deal. Gains in stocks accelerated on Tuesday after the Conference Board’s US May consumer confidence index rose more than expected to a three-month high.
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Stocks also found support on a slide in bond yields spurred on by speculation that Japan could change its debt sales plans, which could lead to stronger demand for US debt securities if Japan cuts its debt issuance. The 10-year T-note yield fell -8 bp to 4.43%. Bloomberg News reported that Japan’s Finance Ministry sent a questionnaire to market participants regarding the appropriate issuance amounts for government bonds, a sign that the ministry may seek to reduce debt issuance.
US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months.
The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-1/2 years.
The Conference Board US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1.
The US May Dallas Fed manufacturing survey of general business activity rose +20.5 to -15.3, stronger than expectations of -23.1.
Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices.
The markets are discounting the chances at 6% for a -25 bp rate cut at the next FOMC meeting on June 17-18.
The markets this week will focus on any tariff news or signs of new trade deals. On Wednesday, the minutes of the May 6-7 FOMC meeting will be released. Also, after Wednesday’s close, Nvidia will report its quarterly earnings. On Thursday, weekly initial unemployment claims are expected to climb +3,000 to 230,000. Also, Q1 GDP is expected unchanged at -0.3% (q/q annualized). In addition, Apr pending home sales on Thursday are expected to fall -1.0% m/m. On Friday, Apr personal spending is expected up +0.2% m/m, and Apr personal income is expected up +0.3% m/m. Also, the Apr core PCE price index, the Fed’s preferred inflation gauge, is expected to rise +0.1% m/m and +2.5% y/y. Finally, on Friday, the University of Michigan May consumer sentiment index is expected to be revised upward by +0.2 points to 51.0 from the previously reported 50.8.
Q1 earnings reporting season is winding down. So far, more than 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest percentage since Q2 of 2024. Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.
Overseas stock markets on Tuesday settled mixed. The Euro Stoxx 50 closed up by +0.37%. China’s Shanghai Composite fell to a 2-1/2 week low and closed down -0.18%. Japan’s Nikkei Stock 225 closed up +0.51%.
Interest Rates
June 10-year T-notes (ZNM25) Tuesday closed up by +14 ticks. The 10-year T-note yield fell -8.5 bp to 4.426%. June T-notes rallied Tuesday on positive carryover from strength in 10-year German bunds. T-notes also have support after Bloomberg News reported that Japan’s finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, which could lead to stronger demand for US debt securities if Japan cuts its debt issuance. Weaker-than-expected US economic news on Tuesday, including April capital goods new orders (nondefense ex-aircraft and parts) and the March S&P CoreLogic composite-20 home price index, also gave T-notes a boost.
Tuesday’s soaring stocks reduced safe-haven demand for government debt and limited gains in T-notes. Also, tepid demand for the Treasury’s $69 billion 2-year T-note auction was negative for T-notes as the auction had a 2.57 bid-to-cover ratio, below the 10-auction average of 2.65.
European government bond yields on Tuesday moved lower. The 10-year German bund yield fell to a 2-1/2 week low of 2.513% and finished down -2.8 bp at 2.532%. The 10-year UK gilt yield dropped to a 2-week low of 4.602% and finished down -1.5 bp to 4.666%.
The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1.
Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months.
ECB Governing Council member Holzmann said the ECB moving interest rates “further south would be more risky than staying where we are and waiting until September.”
Swaps are discounting the chances at 98% for a -25 bp rate cut by the ECB at the June 5 policy meeting.
US Stock Movers
The Magnificent Seven stocks rallied Tuesday and boosted the overall market. Tesla (TSLA) closed up more than +6% and Nvidia (NVDA) closed up more than +3%. Also, Alphabet (GOOGL), Meta Platforms (META), Amazon.com (AMZN), Apple (AAPL), and Microsoft (MSFT) closed up more than +2%.
Chip stocks moved higher Tuesday and supported gains in the broader market. Marvel Technology (MRVL) and ARM Holdings Plc (ARM) closed up more than +5%, and Microchip Technology (MCHP) and ON Semiconductor (ON) closed up more than +4%. Also, Advanced Micro Devices (AMD), KLA Corp (KLAC), NXP Semiconductors NV (NXPI), and Texas Instruments (TXN) closed up more than +3%. In addition, Lam Research (LRCX), Analog Devices (ADI), Micron Technology (MU), Applied Materials (AMAT), Broadcom (AVGO), ASML Holding NV (ASML), and Qualcomm (QCOM) closed up more than +2%.
Travel stocks and cruise line operators moved higher on Tuesday. Carnival (CCL) and Royal Caribbean Cruises Ltd (RCL) closed up more than +6%, and Southwest Airlines (LUV) and Host Hotels and Resorts (HST) closed up more than +5%. Also, United Airlines Holdings (UAL) and Norwegian Cruise Line Holdings (NCLH) closed up more than +4%, and Delta Air Lines (DAL), Expedia Group (EXPE), Hilton Worldwide Holdings (HLT), and Mariott International (MAR) closed up more than +3%.
Hologic (HOLX) closed up more than +14% to lead gainers in the S&P 500 after the Financial Times reported the company rejected a non-binding offer from TPG and Blackstone to purchase it for $16 billion.
Informatica (INFA) closed up more than +6% after Salesforce Inc. agreed to buy the company for about $8 billion.
Block Inc. (XYZ) closed up more than +5% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $72.
Vertiv Holdings (VRT) closed up more than +5% after Evercore ISI raised its price target on the stock to $150 from $100.
Gold mining stocks slid on Tuesday as the price of gold fell nearly -2%. As a result, Gold Fields Ltd (GFI) closed down more than -4%, and Anglogold Ashanti Plc (AU) and Newmont (NEM) closed down more than -1%.
PDD Holdings (PDD) closed down more than -13% to lead losers in the Nasdaq 100 after reporting Q1 adjusted operating margin declined to -19.1%, the lowest since Q1 of 2022.
Fair Isaac (FICO) closed down more than -11% to lead losers in the S&P 500 after FHFA Director Pulte said he is “still not happy with FICO” and his agency will be making some decisions on the rising cost of credit score reports in the next one to three weeks.
AutoZone (AZO) closed down more than -3% after reporting a Q3 gross margin of 52.7%, weaker than the consensus of 53.4%.
Copart (CPRT) closed down more than -1% as analysts cut their price targets on the stock by an average of -5% since it reported earnings last Thursday.
Earnings Reports (5/28/2025)
Agilent Technologies Inc (A), Capri Holdings Ltd (CPRI), Dick’s Sporting Goods Inc (DKS), elf Beauty Inc (ELF), HP Inc (HPQ), Macy’s Inc (M), nCino Inc (NCNO), Nordson Corp (NDSN), Nutanix Inc (NTNX), NVIDIA Corp (NVDA), Pure Storage Inc (PSTG), Salesforce Inc (CRM), SentinelOne Inc (S), Synopsys Inc (SNPS), U-Haul Holding Co (UHAL), Veeva Systems Inc (VEEV).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Rally Sharply on Trade Optimism and Lower Bond Yields

Shares of major semiconductor stocks Broadcom (NASDAQ: AVGO), Advanced Micro Devices (NASDAQ: AMD), and Arm Holdings (NASDAQ: ARM) rallied on Tuesday, rising 3%, 3.9%, and 5.3%, respectively.
Chip stocks generally had a good day, as President Trump announced a delay to his threat of 50% tariffs on European Union goods to July 9, seemingly paving the way for negotiations. In addition, a "soft" economic indicator in May's Consumer Confidence readings bounced back in a big way from its April plunge.
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Finally, several major chip manufacturers submitted letters to the Department of Commerce regarding upcoming potential semiconductor tariffs. Included was a threat from Taiwan Semiconductor Manufacturing (NYSE: TSM) that significant tariffs could derail its announced U.S. projects. Of note, all three of these companies produce their chips at TSMC's Taiwan fabs currently.
A good bounce back for semiconductors
Semiconductors have been some of the most sensitive to the ongoing trade and tariff controversies of the young Trump administration. While semiconductors are a long-term growth industry, the industry can be quite cyclical. Therefore, concerns over growth slowdowns or recessions are likely to cause turmoil in these stocks.
In addition, given the very-international nature of semiconductor manufacturing, supply chains, and materials, semiconductors are doubly sensitive to all the tariff uncertainty. Will chips be tariffed? If not, what about the devices they go into, which are largely assembled overseas? How about the materials and chipmaking equipment that chipmakers use -- for instance, EUV machines, which are only available from the Netherlands?
As such, the Trump administration's threat of 50% tariffs on E.U. imports sent these stocks downward on Friday. But on Sunday, President Trump announced an extension to the tariff threat to July 9 on his social media platform Truth Social, giving relief and room for continued negotiations.
In addition to that relief, most economically sensitive stocks rallied upon this morning's Consumer Confidence readings for May. According to this month's survey from The Conference Board, consumer confidence bounced back in a big way to a 98 reading. That's a massive beat over the expectations of 86.3, and a 12-point increase over the April lows.
During May, President Trump walked back more of his April tariff threats, perhaps most consequentially the highly punitive 145% tariff on China on May 12, to "just" a more manageable 30%, while trade talks continued.
Given increased consumer sentiment will go a long way toward staving off a recession, it's no wonder chip stocks moved significantly higher today.
Finally, a potential threat from TSMC to the Trump administration could be adding additional fuel to these stocks, which largely have their chips manufactured by the Taiwanese manufacturing giant in Taiwan.
The Trump administration is still contemplating tariffs on foreign-made semiconductors in an effort to spur investment in U.S. chipmaking. To ease the administration's concerns, TSMC pledged an additional $100 billion investment in the U.S. a couple of months ago in March.
However, that wouldn't necessarily exempt TSMC from tariffs. Last week, leading chip manufacturers all wrote responses to the U.S. Commerce Department's ongoing investigation into semiconductor tariffs under Section 232 of the Trade Expansion Act of 1962.
In TSMC's letter, TSMC Arizona Secretary T.C. Morris Cheng wrote that the imposition of tariffs on chips or equipment could threaten the viability of those future manufacturing plants announced by TSMC back in March, which were announced to great fanfare, along with leading Trump administration officials.
Publishing this letter could also be helping the stocks of these chipmakers, who all produce chips at TSMC's Taiwan fabs today. The thinking could be that the Trump administration would exempt chips made by TSMC's current leading-edge operations in Taiwan, to preserve that massive investment in the U.S. If those chips are exempt, they would theoretically stay more affordable and wouldn't be disadvantaged relative to rival chips made in the U.S.
Chip stocks could see a further rally on the back of AI
In addition to the tariff and trade relief, chip stocks may also be looking forward to Nvidia's (NASDAQ: NVDA) earnings tomorrow. Nvidia's results are often used as a proxy for the strength of artificial intelligence (AI) infrastructure investment generally. And although Broadcom's ASICs and AMD's MI-series chips compete with Nvidia in that area, positive results could boost confidence in the overall sector. Meanwhile, Nvidia also uses Arm-based licenses to produce its own Grace CPUs that complement its GPUs, so Arm often trades alongside Nvidia as well.
Last week's decline and Tuesday's bounce back just go to show that leading semiconductor stocks are some of the most volatile in the market. However, long-term investors riding out the ups and downs have profited handsomely. The sector has been the best-performing in the market over the past decade.
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Billy Duberstein and/or his clients has positions in Broadcom and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Semiconductor Stocks Broadcom, AMD, and Arm Holdings Rallied Today

The S&P 500 Index ($SPX) (SPY) today is up +1.59%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.25%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.93%. June E-mini S&P futures (ESM25) are up +1.58%, and June E-mini Nasdaq futures (NQM25) are up +1.92%.
Stock indexes today are trading higher after President Trump over the weekend extended the deadline for the European Union to face 50% tariffs until July 9 after threatening to impose a 50% tariff on EU goods starting June 1. Stocks also garnered support from today's comments from National Economic Council Director Hasset, who said, "We'll probably see a few more trade deals, even this week," with India among the countries that are close to securing a deal. Gains in stocks accelerated today after the Conference Board US May consumer confidence index rose more than expected to a 3-month high.
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Stocks also found support on a slide in bond yields spurred on by speculation that Japan could change its debt sales plans, which could lead to stronger demand for US debt securities if Japan cuts its debt issuance. The 10-year T-note yield is down -5 bp to 4.46%. Bloomberg News reported that Japan's Finance Ministry sent a questionnaire to market participants regarding the appropriate issuance amounts for government bonds, a sign that the ministry may seek to reduce debt issuance.
US Apr capital goods new orders nondefense ex-aircraft and parts fell -1.3% m/m, weaker than expectations of -0.2% m/m and the biggest decline in 6 months.
The US Mar S&P CoreLogic composite-20 home price index rose +4.07% y/y, weaker than expectations of 4.50% y/y and the smallest increase in 1-1/2 years.
The Conference Board US May consumer confidence index rose +12.3 to a 3-month high of 98.0, stronger than expectations of 87.1.
The US May Dallas Fed manufacturing survey general business activity rose +20.5 to -15.3, stronger than expectations of -23.1.
Minneapolis Fed President Kashkari said he favors maintaining the fed funds rate at current levels until there is more clarity on the path of tariffs and their impact on prices.
The markets are discounting the chances at 2% for a -25 bp rate cut at the next FOMC meeting on June 17-18.
The markets this week will focus on any tariff news or signs of new trade deals. On Wednesday, the minutes of the May 6-7 FOMC meeting will be released. Also, after Wednesday's close, Nvidia will report its quarterly earnings. On Thursday, weekly initial unemployment claims are expected to climb +3,000 to 230,000. Also, Q1 GDP is expected unchanged at -0.3% (q/q annualized). In addition, Apr pending home sales on Thursday are expected to fall -1.0% m/m. On Friday, Apr personal spending is expected up +0.2% m/m, and Apr personal income is expected up +0.3% m/m. Also, the Apr core PCE price index, the Fed's preferred inflation gauge, is expected to rise +0.1% m/m and +2.5% y/y. Finally, on Friday, the University of Michigan May consumer sentiment index is expected to be revised upward by +0.2 points to 51.0 from the previously reported 50.8.
Q1 earnings reporting season is winding down. So far, more than 90% of companies in the S&P 500 have reported quarterly results, and 77% have beaten estimates, the highest percentage since Q2 of 2024. Earnings growth in Q1 is running at +13.1%, compared with just +6.6% expected before the start of the season. Full-year 2025 corporate profits for the S&P 500 are seen rising +9.4%, down from the forecast of +12.5% in early January.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up by +0.70%. China's Shanghai Composite fell to a 2-1/2 week low and closed down -0.18%. Japan's Nikkei Stock 225 closed up +0.51%.
Interest Rates
June 10-year T-notes (ZNM25) today are up by +8 ticks. The 10-year T-note yield is down -5.0 bp to 4.461%. June T-notes are climbing today on positive carryover from strength in 10-year German bunds. T-notes also have support after Bloomberg News reported that Japan's finance ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds, which could lead to stronger demand for US debt securities if Japan cuts its debt issuance. Weaker-than-expected US economic news today, including April capital goods new orders nondefense ex-aircraft and parts, and the March S&P CoreLogic composite-20 home price index, also gave T-notes a boost.
Today's soaring stocks are reducing safe-haven demand for government debt and limiting gains in T-notes. Also, supply pressures are weighing on T-notes as the Treasury will auction $69 billion of 2-year T-notes later today as part of this week's slate of $211 billion of T-note and floating-rate note auctions.
European government bond yields today are mixed. The 10-year German bund yield fell to a 2-1/2 week low of 2.513% and is down -1.8 bp at 2.543%. The 10-year UK gilt yield rebounded from a 2-week low of 4.602% and is up +0.4 bp to 4.684%.
The Eurozone May economic confidence indicator rose +1.0 to 94.8, stronger than expectations of 94.1.
Eurozone Apr new car registrations rose +1.3% y/y to 925,000 units, the first increase in four months.
ECB Governing Council member Holzmann said the ECB moving interest rates "further south would be more risky than staying where we are and waiting until September."
Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at the June 5 policy meeting.
US Stock Movers
The Magnificent Seven stocks are rallying today and are lifting the overall market. Tesla (TSLA) is up more than +4%, and Nvidia (NVDA) is up more than +3%. Also, Alphabet (GOOGL) is up more than +2%. In addition, Meta Platforms (META), Amazon.com (AMZN), Apple (AAPL), and Microsoft (MSFT) are up more than +1%.
Chip stocks are climbing today and supporting the broader market. Marvel Technology (MRVL) is up more than -5%, and Advanced Micro Devices (AMD), Microchip Technology (MCHP), ON Semiconductor (ON), and ARM Holdings Plc (ARM) are up more than +4%. Also, ASML Holding NV (ASML), KLA Corp (KLAC), and NXP Semiconductors NV (NXPI) are up more than +3%. In addition, Lam Research (LRCX), Analog Devices (ADI), Micron Technology (MU), Applied Materials (AMAT), GlobalFoundries (GFS), Broadcom (AVGO), and Qualcomm (QCOM), and Texas Instruments (TXN) are up more than +2%.
Travel stocks and cruise line operators are moving higher today. United Airlines Holdings (UAL) is up more than +6%, and Carnival (CCL), Southwest Airlines (LUV), and Royal Caribbean Cruises Ltd (RCL) are up more than +5%. Also, Norwegian Cruise Line Holdings (NCLH) and Delta Air Lines (DAL) are up more than +4%, and Expedia Group (EXPE), Host Hotels and Resorts (HST) and Hilton Worldwide Holdings (HLT) are up more than +3%.
Informatica (INFA) is up more than +5% after Salesforce Inc. agreed to buy the company for about $8 billion.
Block Inc. (XYZ) is up more than +5% after BNP Paribas Exane upgraded the stock to outperform from neutral with a price target of $72.
Vertiv Holdings (VRT) is up more than +4% after Evercore ISI raised its price target on the stock to $150 from $100.
Gold mining stocks are sliding today, with the price of gold down more than -2%. As a result, Gold Fields Ltd (GFI) is down more than -3%, and Anglogold Ashanti Plc (AU) and Newmont (NEM) are down more than -1%.
PDD Holdings (PDD) is down more than -15% to lead losers in the Nasdaq 100 after reporting Q1 adjusted operating margin declined to -19.1%, the lowest since Q1 of 2022.
Fair Isaac (FICO) is down more than -7% to lead losers in the S&P 500 after FHFA Director Pulte said he is "still not happy with FICO" and his agency will be making some decisions on the rising cost of credit score reports in the next one to three weeks.
AutoZone (AZO) is down more than -2% after reporting a Q3 gross margin of 52.7%, weaker than the consensus of 53.4%.
Leidos Holdings (LDOS) is down more than -1% after Baird downgraded the stock to neutral from outperform, citing concerns about the bookings environment.
National Storage Affiliates Trust (NSA) is down -0.54% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $30.
Earnings Reports (5/27/2025)
American Vanguard Corp (AVD), AutoZone Inc (AZO), Box Inc (BOX), Champion Homes Inc (SKY), Critical Metals Corp (CRML), Golar LNG Ltd (GLNG), Golden Matrix Group Inc (GMGI), HEICO Corp (HEI), Okta Inc (OKTA), Semtech Corp (SMTC).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stocks Soar as Trade Tensions Ease and Bond Yields Fall

Below is Validea's guru fundamental report for ARM HOLDINGS PLC - ADR (ARM). Of the 22 guru strategies we follow, ARM rates highest using our P/B Growth Investor model based on the published strategy of Partha Mohanram. This growth model looks for low book-to-market stocks that exhibit characteristics associated with sustained future growth.
ARM HOLDINGS PLC - ADR (ARM) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
BOOK/MARKET RATIO:
PASS
RETURN ON ASSETS:
FAIL
CASH FLOW FROM OPERATIONS TO ASSETS:
PASS
CASH FLOW FROM OPERATIONS TO ASSETS VS. RETURN ON ASSETS:
PASS
RETURN ON ASSETS VARIANCE:
FAIL
SALES VARIANCE:
FAIL
ADVERTISING TO ASSETS:
FAIL
CAPITAL EXPENDITURES TO ASSETS:
FAIL
RESEARCH AND DEVELOPMENT TO ASSETS:
PASS
Detailed Analysis of ARM HOLDINGS PLC - ADR
ARM Guru Analysis
ARM Fundamental Analysis
More Information on Partha Mohanram
Partha Mohanram Portfolio
About Partha Mohanram: Sometimes the best investing strategies don't come from the world of investing. Sometimes research that changes the investing world can come from the halls of academia. Partha Mohanram is a great example of this. While academic research has shown that value investing works over time, it has found the opposite for growth investing. Mohanram turned that research on its head by developing a growth model that produced significant market outperformance. His research paper "Separating Winners from Losers among Low Book-to-Market Stocks using Financial Statement Analysis" looked at the criteria that can be used to separate growth stocks that continue their upward trajectory from those that don't. Mohanram is currently the John H. Watson Chair in Value Investing at the University of Toronto and was previously an Associate Professor at the Columbia Business School.
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About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Validea Detailed Fundamental Analysis - ARM

It may not be a stretch to call artificial intelligence (AI) this generation's most significant growth opportunity. Just think briefly about how much the world has changed since ChatGPT became a thing, and that was just at the end of 2022.
Research by Market Research Future estimates that the global AI industry was worth approximately $106 billion last year, but will grow by over 30% annually to over $2 trillion by 2035.
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Some of the top AI stocks have already produced massive returns over the past couple of years, but can still be tremendous winners over the next decade. Here are three examples, and why they are poised to reward long-term investors.
1. Nvidia: The AI chip landscape could evolve
Nvidia (NASDAQ: NVDA) has been arguably the biggest beneficiary of the initial artificial intelligence investment cycle. Its GPU accelerator chips have become the de facto choice for companies building data centers to train and operate AI models. The good news is that data center spending remains robust.
However, chip demand may eventually shift from cloud data centers to more nuanced AI applications. CEO Jensen Huang recently spoke on several new products, including a desktop-sized AI supercomputer, specialized servers for agentic AI, and software to help develop humanoid robotics. Overall, Huang believes AI is an infrastructure opportunity worth trillions of dollars.
In other words, AI could create opportunities that aren't even evident yet today. Nvidia's foresight helped it race to market dominance in AI accelerator chips, so it's hard to find a better company to invest in that's helping lay the foundation for AI and the new technologies it helps create over the coming decade.
2. Palantir: AI application software is just getting started
Palantir Technologies (NASDAQ: PLTR) is probably the market's hottest AI stock. I've even warned investors about the stock's inflated valuation, so it's not for everyone. But if you're looking a decade ahead, you may not find a company with more exciting growth opportunities. Palantir develops custom software applications on its proprietary platforms. Its growth has accelerated since the company launched its AI-focused AIP platform two years ago.
The company is growing profitably, too, with a whopping Rule of 40 score (revenue growth rate plus profit margin) of 83 in Q1 2025. Palantir's software is highly flexible; it can help guide military missions, optimize supply chains, and manage scheduling for a large hospital. The company started in government, which still accounts for over half its business today, though the private sector will likely drive the bus over the next decade.
Palantir currently has just 622 commercial customers. With approximately 20,000 large corporations operating in the United States alone, customer acquisition could sustain high growth for the foreseeable future. As I said above, investors must tread carefully because Palantir is expensive. Still, this is a long-term winner, and investors can nibble and buy opportunistically if the price decreases.
3. Arm: A catch-all chip stock dominating the industry
Arm Holdings (NASDAQ: ARM) probably has the clearest growth prospects on this list. The company designs and licenses semiconductor chip architecture, including chips used in data centers, smartphones, vehicles, etc. Approximately 47% of the world's chips use Arm-based designs, up from 43% in 2022, so Arm is expanding its market share.
In the next decade, growth in new markets like AI, smart manufacturing, and robotics will lift the global semiconductor market. Research from Roots Analysis estimates the world's semiconductor market was worth $623 billion last year, and will grow to over $1 trillion by 2035. Arm Holdings will benefit, and the company's expanding market share suggests it's winning in the high-growth areas.
Arm Holdings stock is expensive, but that's fair given its industry leadership and jaw-dropping 97% gross profit margin. Analysts believe the company will grow earnings by an average of 28% annually over the long term. This is another stock where investors should buy more when it dips, and let the company grow into its current share price and beyond over the long term.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Artificial Intelligence Stocks You Can Buy and Hold for the Next Decade

Share prices of Arm Holdings (NASDAQ: ARM) initially sank following the cautious outlook it issued with its fiscal 2025 fourth-quarter results on Wednesday, May 7, but the stock has rallied back this week following the news over the weekend that the U.S.-China trade war was cooling down. The stock is now trading up more than 17% over the past year, but down 31% from its summer 2024 all-time highs, as of this writing.
Given the recent volatility the stock has seen, let's take a closer look at the semiconductor company's most recent earnings results and guidance to see what investors should do with their shares.
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Great results but cautious guidance
While its stock price initially tumbled, Arm's fiscal Q4 results were actually quite strong. Its revenue soared 34% year over year to $1.24 billion, with both royalty revenue and license revenue hitting records. That edged past the $1.23 billion analyst revenue consensus.
License revenue led the way, soaring 53% year over year to $634 million. The company said the growth was driven by significant demand for its Armv9 technology, although it noted that license revenue can fluctuate due to the timing and size of multiple high-value license agreements. The company also signed a multi-year artificial intelligence (AI) partnership with the Malaysian government to accelerate the development of an Arm-based AI ecosystem in the country. The deal will give the country access to Arm technology at the CSS (Compute Subsystem) level to rapidly design chips. This means the country is getting deeper access to Arm's chip design framework.
It increased its number of Arm Total Access licenses in the quarter by 4 to 44. More than half of its top 30 customers use this license. Its Arm Flexible Access customer count reached 314.
Royalty revenue, meanwhile, climbed 18% year over year to $607 million. The growth was driven by the continued adoption of its newer Armv9 architecture, which carries a much higher royalty rate than its v8 technology. It said that its royalty growth was broad-based, with strength in the data center, automotive, smartphones, and Internet of Things verticals.
In the data center market, it said it expects half of new server chips and hyperscalers (companies with massive data centers) to be Arm-based this year. Part of this is due to the acceleration of Nvidia's (NASDAQ: NVDA) Blackwell chip. While Nvidia's graphics processing units (GPUs) are not based on ARM architecture, Nvidia's Grace Blackwell superchip combines its GPUs with Arm-based central processing units (CPUs). Arm also said it is seeing more customers turn to it for custom silicon, both with CPU, GPU, and NPU (neural processing unit) solutions.
Meanwhile, despite only a 2% increase in smartphone shipments in the quarter, Arm saw its smartphone royalty revenue increase 30%. The company's technology is in nearly every advanced smartphone, so this is a huge market for it. The company credited the launch of its Armv9-based platform focused on Edge AI, which processes AI workloads on devices instead of the cloud. It said several smartphone chipmakers have begun using the platform.
Annualized contract value (ACV), which smooths out license revenue, climbed 15% to $1.37 billion.
Looking ahead, Arm management did not offer full-year guidance due to limited visibility. It said that about 10% to 20% of its revenue typically comes from shipments into the U.S.
For the first quarter, it is looking for revenue to range between $1.0 billion and $1.1 billion, representing year-over-year growth of 12%. Royalty growth is projected to be between 25% and 30%. However, it faces a tough comparison for licensing revenue. It projected adjusted EPS to be between $0.30 and 0.38. Analysts were looking for adjusted EPS of $0.42 on revenue of $1.1 billion.
Is the stock a buy?
Arm is seeing nice momentum both in the data center, which should continue with the ramp-up of Nvidia's Grace Blackwell superchip. At the same time, it's also seeing strong momentum with smartphones, despite only modest shipment growth. In the past, the company has said its Armv9 technology royalty rates can be up to double for CSS, which is being used both in data centers and edge devices, like smartphones, to handle AI workloads. As such, the company is proving to be an AI winner.
The cooling of the U.S.-China trade war, meanwhile, should help ease much of the pressure from tariffs. While the company is growing much faster than the smartphone market, shipment volumes are still important. This should allay investor fears about a potential smartphone market slowdown.
From a valuation perspective, the stock trades at a forward price-to-earnings (P/E) ratio of over 67 based on fiscal 2026 analyst estimates. That's high, but toward the low end of the range where the stock has traded in the past since its IPO in September 2023.
Data by YCharts.
Overall, I think ARM should be solid over the long run, and I think it has one of the best models in the semiconductor space. However, given its valuation, I would keep position sizes on the smaller side.
Should you invest $1,000 in Arm Holdings right now?
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The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $598,613!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $753,878!*
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

ARM Shares Initially Tumbled on Outlook Before Rallying. Is It Time to Buy the Stock?

Arm Holdings plc ARM stock has lost significantly over the past three months. Shares have plunged 21.8% compared with the industry’s and the Zacks S&P 500 Composite’s declines of 14.4% and 7.8%, respectively.
Three-Month Price Performance
Image Source: Zacks Investment Research
Investors may wonder whether now is the right time to make a move on ARM stock, given its weakness over the past three months. Let’s analyze to conclude.
Strategic Expansion in Server Market Aids Arm Holdings
ARM’s tendency to expand its presence in the server market is gaining significant traction, with industry giants like NVIDIA NVDA and Microsoft MSFT, adopting Arm-based architectures swiftly. NVIDIA is currently using Arm9 for its Grace Blackwell super chip, and Microsoft has announced that it will be expanding its Arm-based data center chips. Per management, nearly 50% of the new server chips shipped to key hyperscalers in 2025 will be Arm-based. This represents a 15% growth from 2024, highlighting the rapid adoption of ARM’s technology in this sector. Substantial growth in server chip market share, backed by major players including NVIDIA and Microsoft, solidifies Arm Holdings’ position as a force to be reckoned with in the high-performance computing field.
ARM’s Business Model: Blueprint for Growth
Arm Holdings’ business model is centered around licensing its chip designs and collecting royalties. This model enables the company to generate a consistent stream of revenues while minimizing capital expenditure. This productive business structure, coupled with strategic partnerships, ensures ARM’s relevance and preference in vital growth areas, including automotive, data centers, and smart devices. Moreover, the company’s robust financial position is underlined by an influx of capital from its initial public offering and a strong cash reserve of $2.7 billion with no debt. This enhances Arm Holdings’ ability to fund R&D, pursue buyouts, and conduct market expansion, providing a significant competitive edge within its industry peers.
Arm Holdings’ Strong Liquidity Position
ARM maintains an impressive liquidity position, facilitated by its consistent cash growth and low short-term debt levels. In the fourth quarter of fiscal 2025, the company’s current ratio (a measure of liquidity) was 5.2, increasing 4.8% from the preceding quarter and growing nearly twice that of the year-ago quarter’s figure. Additionally, the metric surpasses the industry average of 1.38, further strengthening its liquidity position.
Image Source: Zacks Investment Research
ARM’s Top-Line Prospect Strong, Bottom-Line Weak
The Zacks Consensus Estimate for ARM’s first-quarter fiscal 2026 revenues is pegged at $1.1 billion, suggesting 11.8% growth from the year-ago level.
Image Source: Zacks Investment Research
The consensus mark for earnings is pinned at 39 cents per share, down 2.5% from the year-ago quarter.
Image Source: Zacks Investment Research
Tariff Uncertainties Might Affect ARM’s U.S. Demand
Arm Holdings disclosed that nearly 10-20% of its royalty revenues come from shipments into the U.S. market. The current tariff turbulence could increase the cost of imported chips, potentially harming end-market demand within the United States. Furthermore, this economic uncertainty could make imported devices pricier than domestically produced alternatives, affecting ARM’s competitive position within the market. ARM’s royalty payments could be hurt due to the reduction in sales of Arm-based products. We also anticipate that this hiccup could be detrimental to Arm Holdings’ licensing business, potentially delaying new product development and harming demand for ARM’s technology licenses.
Arm Holdings Look Pricey
ARM stock is currently expensive. It is priced at around 61.13 times forward 12-month earnings per share, significantly higher than the industry’s average of 26.62 times. When looking at the trailing 12-month EV-to-EBITDA ratio, ARM is trading at around 95.34 times, far exceeding the industry’s average of 16.4 times.
Refrain From Buying ARM Now
ARM’s expansion within the server market, backed by industry giants such as NVDA and MSFT, sets an optimistic tone for investors. A diversified business model, combined with a strong financial position, provides a solid foundation for future growth. Furthermore, a strong liquidity position captures significant investor attention.
However, Arm Holdings’ current valuation is a red flag. A premium valuation, as such, suggests room for the stock to decline significantly. Hence, we recommend that investors be cautious and refrain from buying the stock at this time. Rather, they should wait for a suitable entry point before buying the stock.
ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Arm Holdings Plummets 22% in 3 Months: Buy, Sell or Hold the Stock?

Below is Validea's guru fundamental report for ARM HOLDINGS PLC - ADR (ARM). Of the 22 guru strategies we follow, ARM rates highest using our Small-Cap Growth Investor model based on the published strategy of Motley Fool. This strategy looks for small cap growth stocks with solid fundamentals and strong price performance.
ARM HOLDINGS PLC - ADR (ARM) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 55% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of ARM HOLDINGS PLC - ADR
ARM Guru Analysis
ARM Fundamental Analysis
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Arm Holdings plc architects, develops, and licenses central processing unit products and related technologies for semiconductor companies and original equipment manufacturers rely on to develop products. The company is involved in the licensing, marketing, research, and development of microprocessors, systems intellectual property (IPs), graphics processing units, physical IP and associated systems IPs, software, tools, and other related services. It also offers system IP products, including memory controller IP, interconnect IP, and other on-chip peripheral components; and compute platforms for a range of devices and applications. The company's products are used in various markets, such as automotive, computing infrastructure, consumer technologies, and Internet of things. It operates in the United States, the People's Republic of China, Taiwan, the Republic of Korea, and internationally. The company was founded in 1990 and is headquartered in Cambridge, the United Kingdom. Arm Holdings plc operates as a subsidiary of Kronos II LLC.

	Change	Change by industry	Min.	Max.	Volume
Yesterday	0.02%	—	$129.93	$135.16	296.14M
Week	6.91%	—	$121.56	$135.16	1.96B
Month	7.21%	—	$114.33	$138.59	10.48B
3 Months	5.99%	—	$80.00	$138.59	25.25B
6 Months	-5.56%	—	$80.00	$182.88	59.74B
Year	-2.48%	—	$80.00	$188.75	160.57B
3 years	—	—	—	—	—
5 years	—	—	—	—	—
All time	104.47%	—	$46.50	$188.75	319.14B

	ARM	By industry
Yesterday	10.30%	—
Week	8.90%	—
Month	19.99%	—
3 Months	39.61%	—
6 Months	48.23%	—
Year	71.05%	—
3 years	140.07%	—
5 years	180.83%	—
All time	—	—

Arm Holdings plc

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