Arm plc(ARM) ZACKS·2025-05-05 23:30Core Insights - The Q1 2025 earnings season is ongoing, with Super Micro Computer (SMCI) and ARM Holdings (ARM) among the companies reporting this week [1][14] - The AI sector has seen a cooling off in 2025, leading to recalibrated expectations for these companies [1] ARM Holdings - ARM is expected to show robust growth, with a Zacks Consensus EPS estimate of 1.2 billion, reflecting a 33% increase compared to the same period last year, driven by the broader AI market [5] - Analysts have made modest downward revisions to EPS expectations since early February, but overall growth outlook remains positive [3][14] Super Micro Computer (SMCI) - SMCI has been a strong performer in 2025, gaining 5% compared to a 3% decline in the S&P 500 [8] - However, expectations for SMCI have significantly declined, with the current Zacks Consensus EPS estimate at 4.9 billion, which is an 18% decrease from earlier estimates [11] - Valuation multiples for SMCI have decreased, with shares trading at an 11.0X forward 12-month earnings multiple, a 47% discount compared to the S&P 500 [10] Comparative Analysis - Revisions for ARM have been more stable compared to the significant negative revisions for SMCI [7][14] - Both companies have outperformed the S&P 500 in 2025, but the outlook for ARM appears more favorable heading into their earnings releases [7][14]