Chip Stock Soars to Record Highs After Earnings

Options traders and analysts are piling on the semiconductor stock

Deputy Editor
Feb 8, 2024 at 10:06 AM
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Wall Street newcomer Arm Holdings PLC (NASDAQ:ARM) is trading at record highs today following its fiscal-third quarter earnings report. Up 38.8% to trade at $106.87  -- earlier rising as high as $107.58 -- the chipmaker beat expectations with adjusted earnings of 29 cents per share on revenue of $824 million, and forecasted better-than-expected earnings and revenue guidance for the fourth quarter.

Unsurprisingly, options traders are targeting the stock at a much faster-than-usual clip. Already today, 92,000 calls and 37,000 puts have been traded, which is 25 times the average intraday volume. New positions are being bought to open at the top four most popular contracts, led by the weekly 2/9 105-strike call.

No less than 12 analysts hiked their price targets on ARM, too. BofA Global Research flashed the most confidence, hiking its price objective from $80 all the way up to $110. These hikes seem overdue, considering the average 12-month target price of $90.89 is an 11.8% discount to current levels. 

On the charts, Arm stock just broke through a ceiling at the $80 mark. The semiconductor concern has added more than 104% over the last three months, and is already up a staggering 40.6% in 2024. This rise is a vast outperformance of the VanEck Semiconductor ETF (SMH), which has added 13.5% so far year to date.

 

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