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(Reuters) -Arm Holdings gave a full-year revenue forecast on Wednesday that missed the expectations of investors who had sent the chip designer's shares soaring last September following its IPO on optimism around AI. Shares of Arm fell about 7% in extended trading after the report. Arm's March-quarter results handily beat expectations but its full-year guidance underscores uncertainty around the pace of the build-out of artificial-intelligence computing and whether investors have lifted AI-related stocks more than is justified by their growth rates.
"The drop is because of the outlook. Arm is priced for outperformance, not this," Summit Insights analyst Kinngai Chan said. Shares of other AI chipmakers dipped after Arm's report, with Nvidia and Advanced Micro Devices each down about 0.
5%. For the current fiscal first quarter, Arm forecast revenue in a range between $875 million and $925 million, with a midpoint of $900 million, compared with an average analyst estimate of $857.5 million, according to LSEG data.
The UK chip designer also said it expects full-year revenue between $3.8 billion and $4.1 billion, with a midpoint of $3.
95 billion. That compares with a consensus estimate of $3.99 billion.
Arm forecast full-year earnings per share between $1.45 and $1.65, compared with average analyst estimates of $1.
54. "I wanted to make sure we set a target that ties to what we have high confidence in to what we can deliver," Arm's finance chief, Jason Child, told Reuters in an inte.
