US Stock Market Move | Second-quarter profit guidance is lower than expected, ARM Holdings (ARM.US) drops more than 11%.

On Thursday, Arm Holdings (ARM.US) fell more than 11%, closing at $144.55. On the news front, the company issued lower-than-expected profit guidance for the second quarter due to increased investment in new product development. The first quarter performance report showed that revenue for the quarter ending in June grew by 12% to $1.05 billion, with earnings per share of 35 cents, both meeting analyst expectations. Looking ahead, Q2 revenue is forecasted to be between $1.01 billion and $1.11 billion, with analysts expecting $1.06 billion; excluding certain items, earnings per share are expected to be between 29 and 37 cents, while analysts' average expectation is 35 cents. Arm is increasing spending to better seize the opportunities in the artificial intelligence trend. CEO Rene Haas stated in an interview that Arm is committed to developing technologies that solidify its position in the AI field. He noted that in the short term, the increase in spending will impact profits, but in the long term, it will drive stronger growth for the company. "We have made a clear decision to increase our investment and are accelerating our R&D spending."