Arm Holdings shares climbed more than 15% on Monday, extending a five-session rally that has now pushed the stock up over 27%. The surge came as artificial intelligence stocks broadly recovered from last week's selloff, with falling Treasury yields and lower crude prices also easing pressure on growth-oriented technology names.
The 10-year Treasury note yield slipped more than 3 basis points to 4.963%, while the 30-year yield declined over 2 basis points to 5.298%. Lower bond yields typically support valuations for growth companies because their future earnings become relatively more attractive compared with fixed-income investments. Conversely, higher yields can raise financing costs and weigh on companies with long-dated growth expectations.
Crude prices dropped more than 2% to an 11-day low amid signs of progress in Middle East negotiations. Investors monitor oil closely because sustained energy cost increases can feed into inflation expectations.
Arm's Financial Performance and Strategic Shift
Investors also had fresh financial data to assess following Arm's fiscal 2026 annual report, filed as a 6-K on September 18. Full-year revenue reached approximately $4.9 billion, up roughly 22.8% from the prior year. Pre-tax profit increased by about 27%, indicating that profitability expanded faster than revenue.
This growth is central to the investment narrative as Arm transitions from a licensing and royalty model toward a broader strategy that includes developing and selling its own processors. The company's new data-center CPU, known as the AGI CPU, has become a key part of that story.
SoftBank Expands Arm-Backed Borrowing
SoftBank Group increased its margin loan backed by Arm shares by $5 billion to $25 billion, according to a Bloomberg report on Friday. This marks the third time SoftBank has expanded the facility, which uses its Arm stake as collateral. The move supports founder Masayoshi Son's ambitious AI investment strategy, including a nearly $65 billion commitment to OpenAI.
For Arm investors, the immediate read-through is not about a change in the semiconductor company's fundamentals. Instead, the transaction highlights the value SoftBank can extract from its Arm holding without selling shares. The ability to increase the facility suggests lenders were willing to provide additional financing against Arm stock, which can be interpreted as confidence in the value and liquidity of the shares.
However, the financing creates a closer link between SoftBank's AI strategy and Arm's share price. A significant decline in Arm's shares could reduce the value of the collateral supporting the borrowing.
OpenAI's Spending Plans Reinforce AI Infrastructure Demand
OpenAI expects to burn through $278 billion in cash between 2026 and 2030 as it increases spending on computing power and infrastructure, the Financial Times reported on Friday, citing a company presentation. The company projects revenue to grow tenfold over the same period, from $36 billion this year to $350 billion in 2030, with cumulative revenue of $840 billion through the end of the decade.
These spending plans reinforce expectations for continued AI infrastructure investment despite last week's warnings from AI leaders, including OpenAI's Sam Altman.
Arm CEO Highlights AGI CPU Demand
Arm CEO Rene Haas told CNBC's Jim Cramer last Wednesday that he was increasingly confident Arm could meet Wall Street's higher revenue expectations for its AGI CPU, a purpose-built processor for agentic AI workloads. The company first disclosed visibility into approximately $2 billion of demand for the chip during its May earnings call, double the $1 billion outlined when the CPU was announced in March.
Cramer also offered a positive assessment of Arm on September 16, noting that the stock had reached $452 in June before falling to just under $244, a decline of about 46%. He argued that investors should consider the stock's performance over a longer period rather than focusing on the recent pullback.
This article is for informational purposes only and does not constitute financial advice.
