Arm Holdings (ARM) Stock Drops 4% as Tech Sector Faces Sharp Selloff

Key Points:

Arm Holdings stock closed at $135.62 on December 11, 2025, representing a 4.17% decline during the trading session. The semiconductor company saw its shares trade in a range between $133.09 and $138.26 throughout the day.

Arm Holdings plc American Depositary Shares, ARM

The stock movement came as the broader semiconductor sector experienced a 3.26% decline. NVIDIA, a major player in the chip industry, dropped 3.26% following its earnings report, which triggered selling across the sector.

Leveraged Funds Amplify the Decline

Leveraged exchange-traded funds tracking Arm Holdings experienced even steeper losses. The ARMG fund fell 7.59%, while ARMW dropped 5.63% during the same trading session.

Turnover for Arm Holdings reached 2.485 million shares on the day. The stock’s 200-day moving average stands at $137.81, which is above the current trading price.

Technical indicators showed mixed signals for the stock. The Relative Strength Index registered at 58.42, approaching oversold territory but still in neutral range. The MACD indicator showed a reading of negative 3.35, suggesting bearish momentum.

Arm Holdings currently trades with a price-to-earnings ratio of 174.54. The company’s market capitalization stands at $143.69 billion, with a 52-week trading range between $80.00 and $183.16.

Valuation Questions Persist

The stock’s dynamic P/E ratio of 195.51 has raised questions among investors about valuation levels. Arm Holdings reported earnings per share of $0.22, which analysts consider below industry standards.

Short interest in the stock currently stands at 10.41%, with 3.82 days to cover. The company operates in the semiconductors and semiconductor equipment industry within the information technology sector.

Arm Holdings develops and licenses the ARM architecture, which powers 99% of the world’s smartphone CPU cores. The company also maintains strong market share in other battery-powered devices including wearables, tablets, and sensors.

Despite the recent decline, analyst consensus maintains a price target of $168.52 for the stock. This represents potential upside from current trading levels. The company has no upcoming dividends or earnings scheduled at this time.

The stock traded at $135.65 in pre-market hours on December 11, showing a further decline of 0.49 from the previous close. The company’s return on equity stands at 3.3%, with a debt-to-equity ratio of 0.1.

Arm Holdings recently signed an agreement with South Korea’s industry ministry to open a chip school in the country. The initiative plans to train 1,400 specialists in chip design for artificial intelligence applications.

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