Goldman Cuts ARM To Sell On Shocking Smartphone Weakness

 Arm Holdings ADRs sank nearly 9% in premarket trading, on track for the largest intraday decline in almost a year, after the chip-architecture company reported softer-than-expected fiscal fourth-quarter royalty revenue tied to a slowdown in the smartphone industry, while assuring investors that data center demand can offset the slump.

During an earnings call, Wells Fargo analyst Joe Quatrochi asked Arm CEO Rene Haas:

"Clearly, data centers are very strong and accelerating, but then how do you think about consumer electronics, smartphones, et cetera?"

Haas responded:

So in terms of Q4, as we said before the quarter, we had a bit of a tough comp in that. We had a particularly strong ramp of maybe 400 [ph], a year ago, more so than what we expected this year.

As a result, you saw a bit of a slowdown in royalty revenue. As indicated by our guidance, we're expecting that to get back to the kind of 20% range by Q1.

So I would say within -- you know, the assumptions within our expectations are, we will probably continue to see unit growth, I think actually flip to negative for the mobile market in this last quarter. We're going to continue to see very flattish, maybe slightly negative numbers for the overall market.

Haas' comments about the smartphone slowdown are key because Arm's smartphone exposure remains large, and mobile application processors accounted for about 46% of its total royalty revenue in 2025.

Haas has made clear to analysts that the push into data centers and other markets will help offset Arm's high exposure to a softening smartphone market.

Royalties, a closely watched metric for Arm, generated $671 million in fourth-quarter revenue, missing the Bloomberg Consensus estimate of $693.3 million.

"We're seeing the acceleration of Arm being a significant player in the data center," Haas said in an interview, quoted by Bloomberg.

As for the rest of fourth-quarter earnings, Arm beat on total revenue, adjusted EPS, operating income, margins, and licensing revenue. Revenue rose 20% year over year to $1.49 billion, slightly ahead of estimates, while adjusted EPS of 60 cents beat the 58-cent estimate. Adjusted operating income also beat at $731 million, with a very strong operating margin of 49.1%.

The strongest part of the report was license and other revenue, which jumped 29% year over year to $819 million, well above estimates of $775.6 million. That suggests strong customer demand for future Arm designs, particularly in AI, data centers, and new chip programs.

But as we noted above, royalty revenue missed expectations ...

Here's a snapshot of the fourth quarter (courtesy of Bloomberg):

Adjusted EPS 60c vs. 55c y/y, estimate 58c

EPS 29c

Total revenue $1.49 billion, +20% y/y, estimate $1.47 billion

• License and other revenue $819 million, +29% y/y, estimate $775.6 million

• Royalty revenue $671 million, +11% y/y, estimate $693.3 million

Annualized contract value $1.66 billion, estimate $1.58 billion

Adjusted net income $641 million, estimate $624.3 million

Adjusted gross profit $1.47 billion

• Adjusted gross margin 98.3%, estimate 98.1%

Adjusted operating expenses $734 million, estimate $743.6 million

Adjusted operating income $731 million, estimate $696.4 million

• Adjusted operating margin 49.1%

Adjusted free cash flow $152 million, estimate $374 million

Arm’s first-quarter forecast is broadly in line on revenue, better on earnings, and better on costs (courtesy of Bloomberg):

Sees revenue $1.21 billion to $1.31 billion, estimate $1.25 billion (Bloomberg Consensus)

Sees adjusted EPS 36c to 44c, estimate 37c

Sees adjusted operating expenses about $760 million, estimate $803.1 million

In markets, Arm ADRs sank nearly 9%, the largest intraday decline since July 31, 2025, of -13.5%. On the year, shares are up 117%.

Goldman analyst James Schneider told clients following earnings, "We expect the stock to be range-bound following revenue and EPS guidance that was just above the Street, with an increase to demand expectations for the company's CPU business."

"We are Sell rated on ARM given our concerns around the near-term pressures in the royalty business, the lack of clear competitive advantage relative to peers in chip manufacturing, and elevated valuation relative to peers - but could be more constructive if we see greater evidence of an acceleration in royalty growth or more visibility into greater scale in chip manufacturing," Schneider added.

Additional analyst commentary (courtsey of Bloomberg):

Bloomberg Intelligence analyst Kunjan Sobhani

• "Arm's fiscal 4Q results reflect a mixed near-term setup, with handset and memory-related weakness weighing on royalties, but partly offset by persistent AI strength."

Daiwa analyst Louis Miscioscia

• Arm's royalty revenue missed due to a shortfall in lower-end cell phone demand, which was weaker than expected due to the higher cost of memory.

Evercore ISI analyst Mark Lipacis (outperform, price target $326)

• Lipacis was more bullish, saying that after examining other trillion dollar market cap companies, believe "ARM has the similar necessary ingredients to cross that $1T threshold themselves"

Bloomberg data shows most of Wall Street is bullishing on ARM... Goldman and AlphaValue are the only with "Sell" ratings ... 

https://www.zerohedge.com/markets/goldman-sell-rated-arm-smartphone-weakness-pressures-royalty-business

UAE Slips Hidden Oil Tankers Through Straits Of Hormuz

 While conventional wisdom, especially after Trump's counter-blockade of Iran's blockade, that the Strait of Hormuz is completely blocked, the reality is that the UAE is now running loaded crude tankers through the Iranian-controlled Strait of Hormuz with transponders switched off - just like sanctioned Iranian ghost fleets in the pre-war period - just to pry loose a fraction of the oil bottled up in the Gulf.

According to shipping data reported by Reuters, industry sources, and satellite tracking, Emirati state-owned energy giant ADNOC and willing Asian buyers have moved at least 6 million barrels of Upper Zakum and Das crude out of the Gulf in April alone via four tankers. While that’s a drop in the bucket compared to pre-war exports, it proves participants are willing to roll the dice with Iranian drones and speedboats to unlock trapped supply.

At the same time, other Gulf heavyweights Iraq, Kuwait, and Qatar have largely thrown in the towel. Saudi Arabia is rerouting via the Red Sea where possible. Only the UAE is playing an occasional round of Russian roulette through the world’s most critical oil chokepoint.

Dark Fleet Playbook Comes to Abu Dhabi

Emirati tankers are sailing with AIS trackers deliberately shut off, the same tactic Tehran has used for years to evade U.S. sanctions. One VLCC, the Hafeet (managed by ADNOC’s own logistics arm), loaded 2 million barrels of Upper Zakum on April 7, slipped through the strait by April 15, then did a ship-to-ship transfer to the Olympic Luck outside, which delivered it to Malaysia’s Pengerang refinery (a Petronas-Aramco JV). 

Another, the Aliakmon I, carried 2 million barrels of Das crude out on April 27 and dumped it into Oman’s Ras Markaz storage. Two Suezmax tankers headed straight to South Korean refiners.

One Upper Zakum parcel fetched a record $20 premium over official selling prices which explains why UAE sellers are willing to risk it all just to get it to a desperate buyer.

ADNOC has already slashed exports by over 1 million bpd since the Iran war kicked off February 28, down sharply from 3.1 million bpd last year. Most of its remaining volumes move via the safer Fujairah pipeline route, but the Gulf-side crude is now trapped.

Meanwhile, between the combined Iranian and US blockades on Iranian barrels, roughly one-fifth of global oil and gas supply has been disrupted. Brent and WTI have responded accordingly, trading well north of $100.

Still, the dangers aren’t theoretical. On Monday, the UAE accused Iran of drone-attacking the empty ADNOC tanker Barakah in the strait. Yet the loaded runs continue. 

ADNOC is already notifying customers it plans to keep loading Das and Upper Zakum from inside the Gulf in May, with ship-to-ship transfers outside at Fujairah or Oman’s Sohar. Talks with Asian refiners are ongoing. 

Not that this needs to be repeated, as we have been doing every day for the past 2+ months, but this episode again exposes the fragility of global physical energy flows. A fifth of supply can be choked off by regional war, yet the system is so tight that buyers in Southeast Asia and Korea are still lining up for whatever dribbles through, even if there is a clear risk it could end up as a flaming fireball somewhere in the Persian Gulf. This, as inventories are draining at a record pace among buyers of oil, storage is filling to the brim at the sellers, prices are bid and the risk premium is only getting fatter.

Meanwhile, the rest of the Gulf sits on barrels it can’t (or won’t) move without bribes to Tehran, massive discounts or outright halts. Worse, this isn’t a temporary disruption: It’s the new normal until someone blinks or the conflict dramatically escalates to de-escalate. With Hormuz still largely blocked, every barrel that makes it out is a reminder of just how thin the ice under the global oil complex really is.

https://www.zerohedge.com/markets/uae-slips-hidden-oil-tankers-through-straits-hormuz

Marijuana Vendors Sued For Allegedly Not Warning Consumers Of Risks

 by Matthew Vadum via The Epoch Times,

Companies that legally sell recreational marijuana to adults are being sued in Illinois and Connecticut for allegedly not warning customers of the possible health problems caused by the drug.

Attorneys for the plaintiffs say these proposed class actions—four in all—that were filed May 4 in federal and state courts are the first of their kind. Federal and state court rules govern whether a class action gets certified and is allowed to proceed.

The lawsuits come after recent studies reported that marijuana use can change human DNA and cause psychosis, and that the drug increases the risk of death from cardiovascular disease, cancer, and other causes.

The newly filed legal complaints say that cannabis is highly addictive and can contribute to mental health disorders such as schizophrenia, suicidal ideation, and depression.

About 129 million Americans say they have used marijuana at some point in their lives. As more states legalize use of the drug, that figure is expected to rise.

The lawsuits allege that the defendants—Cresco, Curaleaf, Green Thumb Industries, and Verano—marketed recreational marijuana for its supposed medicinal benefits to generate billions of dollars in revenues, while not letting consumers know of health risks.

Attorney Jack Franks in Marengo, Illinois, said the plaintiffs are seeking damages for overpaying or being misled into buying the products.

They are also seeking clear product warnings that spell out the mental and physical health risks, Franks told The Epoch Times.

“It’s a legal product in many states, but it’s not adequately laid out what the risks are,” he said. 

“They deliberately marketed highly potent products while concealing the known risks. Our clients deserve the truth.”

Attorney James Bilsborrow of New York City said the case rests upon “decades of gold-standard medical research establishing that cannabis, especially high-potency cannabis, is wreaking havoc on public health.”

“Rather than warn consumers about these well-established dangers, the cannabis industry, following the tobacco and opioid industries’ playbook, has denied the risks and marketed its products as safe or even therapeutic,” he told The Epoch Times.

The plaintiffs in the Illinois lawsuit are 41 consumers who purchased cannabis products, according to the federal class action filed in U.S. District Court for the Northern District of Illinois.

The legal complaint alleges that cannabis purveyors promote their products to “an unsuspecting public through a public relations megaphone as the antidote to ailments of all kinds, including, among others, insomnia, narcolepsy, over-eating, cancer, auto-immune disorders, neuropathy, pain, anger, boredom, sadness, shyness, irritable bowel syndrome, grief, and opioid addiction.”

The similar Connecticut lawsuit names as plaintiffs 18 consumers who bought marijuana products.

The legal complaints for the lawsuits filed in state courts in Illinois and Connecticut were not available at publication time. The plaintiffs’ attorneys said the state lawsuits are largely the same as the federal lawsuits.

A Verano spokesman told The Epoch Times that the company strongly disagrees “with the allegations and [intends] to defend the matter vigorously.”

“This lawsuit is part of a broader litigation campaign that plaintiffs’ counsel has brought against several multi-state cannabis operators, and mirrors claims that have been rejected by courts in similar legal actions against multi-state operators in the industry earlier this year,” the company said.

Verano complies with applicable state laws and regulations, including those related to labeling, testing, and warning requirements, the company said.

“The medical use and benefits of cannabis have also long been recognized by the states themselves, as reflected in the comprehensive medical marijuana programs that state legislatures and regulators have established and overseen for years.”

The Epoch Times reached out for comment to the defendants, Cresco, Curaleaf, and Green Thumb Industries.

No replies were received by publication time.

https://www.zerohedge.com/medical/marijuana-vendors-sued-allegedly-not-warning-consumers-risks

Saudi Arabia Vs UAE

 By Benjamin Picton, Senior Market Strategist at Rabobank

The Little Red Hen

Markets are bulled-up this morning on prospects for peace in the Iran war. The S&P500 and NASDAQ closed at fresh all-time highs and Brent crude prices closed 7.8% lower at $101.27/bbl. While some analysts are understandably wary of another Axios report touting progress in Middle East relations (and therefore lower oil prices!), markets are clearly not in a mood to look a gift horse in the mouth.

Iranian foreign ministry spokesman Ismail Baghieri told news sources that Iran is reviewing a 14-point American memo that outlines terms for peace. Axios reports that those terms include Iran giving up the nuclear fuel that it has enriched to near-weapons-grade (though, there is no detail on who they would give it up to), an Iranian commitment to never seek a nuclear weapon, moratoriums on Iranian nuclear enrichment, Iranian agreement to enhanced UN-led nuclear inspections, and a framework to gradually restore navigation through Hormuz and lift US sanctions.

The IRGC Navy announced via X that safe transit through Hormuz would be ensured. This comes just 24 hours after Donald Trump paused Operation Freedom, an initiative to free commercial ships trapped in the Persian Gulf that triggered exchanges of fire between Iran and the US and its allies – most notably the UAE. In a curious case of timing, Iran officially launched a new government agency called the ‘Persian Gulf Strait Authority’, which perhaps raises the probability that transit through Hormuz will not look as it did prior to the war, and that the Iranian tollbooth could be a concession made by the American side to get a deal done.

This has far-reaching implications for the post-war order. At face value, acceding to Iran operating Hormuz as a tollbooth looks like an American strategic defeat since it leaves the GCC and ‘the West’ in a worse position than prior to the war with respect to energy and other commodity flows. It also sets an uncomfortable precedent whereby other countries might get the idea that freedom of navigation through natural maritime chokepoints is no longer sacrosanct, and certainly no longer underwritten by US naval power for free. Regular readers will recall that an Indonesian minister recently did a bit of kite flying on the idea of tolling the Strait of Malacca, which would have sent a chill up the spine of most of East Asia and Oceania and drew quick (but polite) denunciations across the region.

On the plus side for the Americans, leaving Hormuz in nominal Iranian control would only increase the incentive for the GCC to build the infrastructure to send oil West to Israeli ports or Southeast into the Gulf of Oman. It seems awfully coincidental that the UAE announced that it would be leaving OPEC immediately after the US agreed to provide it with dollar swaplines, which are usually reserved for European allies. It seems to be the case that the UAE has answered the call to partner with the US and Israel because the latter two provided it with support versus Iran where others didn’t. This could mean that the UAE supports US ambitions after the war ends by pumping more crude than would have been the case had it remained in OPEC, but the question of where that oil flows and whether it remains part of a mostly fungible world market now looms.

This may rub Saudi Arabia the wrong way given that the Kingdom vies with the UAE for influence in the region and the two have been at odds recently in Yemen. Media reports that Trump’s decision to pause Operation Freedom came after Saudi Arabia suspended permission for the US military to use its bases and airspace to support it. Was this decision by Saudi Arabia informed by deepening US ties with the UAE?

There is also the question of how Europe fits in with a post-war order. France is now moving the Charles de Gaulle aircraft carrier and its escorts towards the Middle East to support a Franco-British led mission to support freedom of movement through Hormuz. British PM Starmer, meanwhile, is in campaign mode for today’s round of UK local government elections, making the pitch that he kept Britain out of the war while his opponents from the Conservative Party and Reform were of a mind to support the Americans.

This reminds me of the story of the little red hen:

US: “Who will help me to ensure that Iran never acquires a nuclear weapon?”
“Not I!” said France. “Not I!” said Britain. “Not I!” said South Korea. “Not I!” said Australia.
US: “Fine. Then I will do it myself.”

US: “Who will help me to re-open the Strait of Hormuz?”
“Not I!” said France. “Not I!” said Britain. “Not I!” said South Korea. “Not I!” said Australia.
US: “Fine. Then I will do it myself.”

US: “Who will help me to consume the cheap energy from Venezuela, the US homeland, and the UAE?”
“I will!” said France. “I will!” said Britain. “I will!” said South Korea. “I will!” said Australia.
US: ...you get the picture.

The point here is that the US is now in the business of securing physical supply chains and membership of the supply chain club brings not only privileges, but also responsibilities. Namely: the responsibility to meaningfully contribute to the attainment of common geopolitical goals. It doesn’t bear reminding that the US has been critical of NATO and the EU, and the latest US national security strategy openly questions whether political and demographic changes might mean that Western countries won’t be US allies at all in a few years’ time. One need only look at the political preferences of Gen Zs in those countries to understand the concern.

There are diverging reactions to this across the rest of the West. Canada under Mark Carney and – to a certain extent – France under Emmanuel Macron have taken up the mantle of official leaders of the opposition to Trumpism and the breaking of the liberal world order to remake the global settlement in a way that allows the US to respond to Chinese production and supply chain dominance. Israel, the UAE and Argentina are “all the way with Donald J”, Japan and Australia (who has just announced an 82% tariff against Chinese steel) are increasingly leaning that way as defense and economic ties deepen and geographical realities overrule the luxury of preference.

Which way various countries choose to jump will inform market access, investment decisions, supply chain access, cost of credit and all sorts of other important variables in the future. Choose wisely, dear reader.

https://www.zerohedge.com/markets/saudi-arabia-vs-uae

Entrada positive Phase 1/2 Duchenne data, non-GAAP EPS $-0.95 beats, revenue misses

 

Entrada posts positive Phase 1/2 ENTR-601-44 Duchenne data and Q1 2026 non-GAAP EPS $-0.95 beats, revenue $875,000 misses estimates

• Phase 1/2 ENTR-601-44 Duchenne study showed functional gains, increased dystrophin expression and a favorable safety profile in treated patients.
• Cohort 1 of ELEVATE-44-201 showed statistically significant improvement on the Time to Rise functional measure.
• Company has begun dosing a higher-dose Cohort 2 of ELEVATE-44-201, with data expected by year-end 2026.
• Q1 2026 non-GAAP EPS was $-0.95, down 126% YoY from the prior year.
• Q1 2026 revenue of $875,000 declined 96% YoY versus the prior year period.
• Q1 2026 net loss widened to $39.7 million on $0.9 million in collaboration revenue.
• Company ended Q1 2026 with $255 million in cash and investments.
• Entrada expects existing cash and investments to fund operations into the third quarter of 2027.

https://finviz.com/quote?t=TRDA&p=d

Atara: updated ALLELE dataset with historical controls could support BLA resubmission

 

Atara: FDA agrees updated ALLELE dataset with historical controls could support Pierre Fabre tabelecleucel BLA resubmission

• Decision followed a Type A meeting and outlines a clearer U.S. regulatory path for tabelecleucel.

https://finviz.com/quote?t=ATRA&p=d

Agilon beats, raises outlook on risk-adjustment upside

 

Agilon Health beats Q1 2026 estimates and raises 2026 revenue and EBITDA outlook on risk-adjustment upside

• Q1 2026 revenue $1.42B (-7% YoY), net income $49M and adjusted EBITDA $54M reported for the quarter.
• Non-GAAP EPS $1.80 increased 146% YoY in Q1 2026 financial results.
• Q1 beat internal guidance on revenue, medical margin, and EBITDA, driven by risk-adjustment uplift.
• 2026 revenue guidance raised to $5.68-$5.81B with higher medical margin and EBITDA outlook, signaling confidence in improved data and contracting.
• Membership declined due to market and payer exits as company prioritizes profitability over growth.
• Medical cost trend remains elevated and Part D exposure/reserving still introduces earnings uncertainty.
• AI-enabled clinical pathways, especially heart failure, are showing tangible utilization and quality improvements.
• ACO REACH delivered strong Q1 EBITDA aided by one-time CMS fraud-related benchmark adjustment.
• Enhanced data pipeline supports higher estimated risk scores, improving visibility and predictability of results.
• Payer contracting for 2026 added meaningful rate benefit, while 2027 talks focused on margin protection.
• Main concern: Sustainability of margin improvement amid elevated cost trends and ongoing Part D and policy risk.
• Strong quarter, driven by higher risk-adjustment revenue, favorable medical cost development, and disciplined contracting.

https://finviz.com/quote?t=AGL&p=d