ARM Holdings saw a 7.48% drop in shares after missing Wall Street estimates, with licensing revenue of $505 million in Q3, 2.9% below expectations. Qualcomm also fell 9.68% as their forecast was impacted by a global memory shortage. Despite this, ARM posted record quarterly revenue of $1.242 billion driven by AI demand.

ARM’s chip designs dominate smartphones and are expanding into AI data centers. However, uncertainties remain in diversifying into AI chips for servers. A decline in Chinese smartphone production due to memory shortages could negatively impact ARM’s outlook. Shares of Arm, which went public in 2023, are down 4% year-to-date amidst tech market pressures.

Read more at CNBC: Shares of Arm plunge 8% after licensing revenue misses estimates, Qualcomm outlook adds pressure