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ARM Holdings (ARM) shares have broken below the key 900p level as investors balk at a Q4 earnings report card that showed its chip architecture licensed for use 4bn times last year, pre-tax profits growth of 17% a fraction ahead of consensus and growing faster than revenues, and a 25% hike to the FY dividend. What’s not to like? Maybe management’s confidence in the semi-conductor industry is being questioned after Apple’s warning on China stress and rival Imagination Technology’s profits warning earlier this week. Perhaps global recessionary fears are too much to discount given a mature and slowing high-end smartphone market starting to eat into margins and hopes too high that connected devices can ride to the rescue. The tech sector as a whole has also suffered since early February as investors caution about a murky US economic picture and divergent monetary policy, and sentiment having worsened sharply this week. Bears will be eyeing 16-month lows around 810p should the global sell-off persist.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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