Arm shares dropped more than 8% in extended trading on Wednesday after the chip-design company issued weaker-than-expected guidance for the current quarter.

Here’s how the company did in the fiscal fourth quarter compared with LSEG consensus:

• Earnings per share: 55 cents, adjusted vs. 52 cents expected
• Revenue: $1.24 billion vs. $1.23 billion

While Arm topped estimates for the quarter ended March 31, Wall Street is looking ahead to the company’s forecast for the first quarter.

Arm said revenue will be between $1 billion and $1.1 billion. The middle of the range is below the $1.1 billion average analysts estimated, according to LSEG. Earnings per share will be between 30 cents and 38 cents, while analysts were expecting 42 cents.

SoftBank controls about 90% of Arm, and took the company public in 2023. It now has a market cap of over $130 billion as of Wednesday’s close.

Arm designs the fundamental architecture upon which many chips are built, and sells licenses for its designs to companies such as Qualcomm and Nvidia, charging royalty fees on each sale they make. The company claims 99% of premium smartphones are powered by Arm technology.

Royalty revenue in the quarter rose 18% from a year earlier to $607 million.

Net income fell 6% to $210 million, or 20 cents a share, from $224 million, or 21 cents, in the year-ago quarter. Revenue jumped 34% from $928 million a year earlier.

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AppLovin shares soared as high as 15% in extended trading after the company reported earnings and revenue that beat expectations and announced the sale of its mobile gaming business.

Here’s how the company did compared to LSEG consensus estimates:

• Earnings: $1.67 per share vs $1.45 per share expected
• Revenue: $1.48 billion vs $1.38 billion expected

AppLovin also agreed on Wednesday to sell its mobile gaming business to Tripledot Studios in a deal worth $400 million in cash considerations. The advertising tech company will also obtain  a roughly 20% ownership stake in Tripledot Studios, which makes mobile games like Sudoko Friends, Puzzletime and Solitaire Classic.”

The deal is expected to close in the second quarter of 2025.

AppLovin said second-quarter sales should come in the range of $1.2 billion to $1.22 billion, trailing analysts expectations of $1.38 billion.

The company reported first-quarter net income of $576 million, or $1.67 per share, up from $234 million, or 67 cents per share, in the same quarter of 2024.

AppLovin total costs and expenses for the first quarter came in at $820.55 million, representing a 14% increase from the previous year during the same quarter.

The ad-tech firm said in February that it had signed a term sheet to sell its apps business for “total estimated consideration” of $900 million, which included $500 million in cash.

AppLovin’s business has been split between advertising and apps, which is primarily made up of game studios that the company has acquired over the years. With the historic growth in its advertising unit, due to rapid advancements in artificial intelligence, the apps business had become much less important.

The company logged $1.16 billion in first-quarter advertising sales, up from the $678 million it recorded a year ago during the same period.

Sales of the company’s apps-related business for the quarter came in at $325 million, which was a 14% decline from the prior year.

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Nvidia shares rose on Wednesday on a report that the Trump administration plans to revise a set of chip trade restrictions called the “AI diffusion” rule.

The rule, which was proposed in the last days of the Biden administration, organizes countries into three different tiers, all of which have different restrictions on whether advanced AI chips like those made by Nvidia, AMD, and Intel can be shipped to the country without a license.

The Trump administration plans to rescind the rule, Bloomberg reported on Wednesday. The chip restrictions were scheduled to take effect on May 15.

Nvidia had no comment on the reported move by the Trump administration.

Chipmakers including Nvidia and AMD have been against the rule.

AMD CEO Lisa Su told CNBC on Wednesday that the U.S. should strike a balance between restricting access to chips for national security and providing access, which will boost the American chip industry.

Nvidia CEO Jensen Huang said earlier this week that being locked out of the Chinese AI market would be a “tremendous loss.”

Read the full Bloomberg story here: Trump to Rescind Global Chip Curbs Amid AI Restrictions Debate

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