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Has artificial intelligence lost its driving force on the stock market? Fair question, judging by what is happening to the stock of ARM, the British chip giant, which is losing around 10% in the pre-market after publishing lackluster revenue projections for next year. Data that has raised some apprehension among investors over the possibility that technology companies’ spending on artificial intelligence hardware could slow down.
ARM, a company owned by the Japanese giant SoftBank, has so far been one of the biggest beneficiaries of the boom in generative artificial intelligence. Since it landed on the Nasdaq (in September 2023), with an IPO that gave it a valuation of 65 billion dollars, the stock had gained – before today’s collapse – over 40%.
The British company now expects revenue of between $3.8 billion and $4.1 billion for the year to March 2025. Analysts had expected revenue of $4.01 billion. While revenues grew 47%, pushing annual revenue above $3 billion for the first time. These latter numbers were not enough to stop the decline on the stock market, where expectations on AI are dominant.