Arm Holdings came into this Q2 FY2027 report with a rich growth reputation and a stock that had already been under pressure over the past month. The fresh numbers delivered a clear headline: revenue of US$1.44b and non GAAP earnings per share of US$0.52, yet the share price dropped about 13% today to US$166.72.

For a chip design heavyweight often treated as a pure artificial intelligence winner, that gap between solid reported growth and a sharp one day selloff puts Arm’s valuation strain and expectations problem squarely in focus.

Love Arm Holdings’ AI story but uneasy about paying up when a 13% drop on earnings shows how hard expectations are biting? Check out our list of 42 high quality undervalued stocks if you want growth…