Arm Holdings shares dropped nearly 10% in Friday trading as a broader sell-off swept through semiconductor stocks following Intel’s third-quarter earnings report and weaker-than-expected outlook for the current quarter.

Intel released its results after Thursday’s market close. Its report included double-digit revenue growth and substantial gains in its data center and artificial intelligence reporting unit. However, investors focused on the company’s fourth-quarter guidance, which pointed to sequential declines in revenue, gross margin and non-GAAP, or adjusted, earnings per share.

Intel’s projections were also below analyst estimates. The outlook prompted steep losses across a range of chip companies the following day, including Arm, as investors treated the guidance as a possible warning sign for the wider semiconductor sector.

Arm’s exposure to industry pressures

Arm does not manufacture chips. Its asset-light model is based on licensing advanced chip technology, a structure that may leave it less directly exposed than Intel to some manufacturing-related pressures.

Still, the source said Arm could be affected by the same conditions weighing on Intel, including a contraction in PC shipments and rising component costs. The decline in Arm’s stock came as investors reassessed the outlook for semiconductor companies as a group.

Arm is scheduled to report fiscal second-quarter 2027 results next Wednesday, Nov. 4, after the market closes. That update is expected to provide investors with a clearer view of the company’s own operating conditions and outlook.

The original commentary was written by Eric Volkman, who said he holds no position in the stocks mentioned. The Motley Fool said it has positions in and recommends Arm Holdings and Intel, and its disclosure policy is available on its website.

Intel’s earnings release cited in the original report is available here.