Arm Holdings shares surged more than 15% on Monday as a broad recovery in artificial intelligence stocks lifted the semiconductor sector, while falling US Treasury yields and declining crude prices eased some of the pressure on growth-oriented technology shares.
The rally extended a sharp rebound in Arm stock, which has gained more than 27% over the past five trading sessions.
The stock had fallen sharply last Monday as concerns about a potential slowdown in AI development and spending triggered a broader selloff across the sector.
The yield on the 10-year Treasury note fell more than 3 basis points on Monday to 4.963%, while the 30-year Treasury bond yield declined more than 2 basis points to 5.298%.
Lower bond yields can support valuations for growth companies because their expected earnings further in the future become relatively more attractive compared with fixed-income investments.
Higher yields, by contrast, can raise corporate financing costs and put pressure on valuations of companies whose investment and growth expectations extend well into the future.
Crude prices also dropped more than 2% to an 11-day low amid indications of progress in negotiations in the Middle East.
Oil prices are closely watched by investors because sustained increases in energy costs can feed into inflation expectations.
Arm’s revenue and profit growth remain in focus
Investors also have fresh financial results to assess following the publication of Arm’s fiscal 2026 annual report.
The company’s annual report, filed as a 6-K on September 18, showed full-year revenue of approximately $4.9 billion, representing a gain of roughly 22.8% from the previous year.
Pre-tax profit increased by around 27%, meaning profitability expanded faster than revenue during the period.
That growth is important as investors assess Arm’s transition from a business primarily focused on licensing and royalties from its chip architecture toward a broader model that includes developing and selling its own processors.
The company’s new data-center CPU, in particular, has become an important part of the investment narrative surrounding the stock.
SoftBank increases Arm-backed borrowing to $25 billion
Another development drawing attention on Monday was SoftBank Group’s decision to increase its margin loan backed by Arm shares by $5 billion to $25 billion, Bloomberg reported on Friday, citing people familiar with the matter.
It is reportedly the third time SoftBank has increased the margin loan using its stake in Arm as collateral.
The move comes as SoftBank founder Masayoshi Son seeks to finance an increasingly ambitious artificial intelligence investment strategy, including a nearly $65 billion commitment to OpenAI.
For Arm investors, the immediate read-through is not necessarily about a change in the semiconductor company’s fundamentals.
Instead, the transaction highlights the value SoftBank can extract from its Arm holding without immediately selling the shares.
The ability to increase the facility also suggests lenders were willing to provide additional financing against Arm stock.
Strong lender demand for the facility can be interpreted as an indication of confidence in the value and liquidity of the shares.
At the same time, the financing creates a closer connection between SoftBank’s AI investment 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
Recent developments at OpenAI have also reinforced expectations for continued spending on AI infrastructure despite last week’s warnings by AI leaders, including OpenAI’s Sam Altman.
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 seen by the newspaper.
The company expects revenue to increase tenfold over the same period, from $36 billion this year to $350 billion in 2030, according to the report.
OpenAI also expects to generate cumulative revenue of $840 billion through the end of the decade.
Arm CEO points to $2 billion AGI CPU demand
Arm CEO Rene Haas has meanwhile provided investors with another reason to remain focused on the company’s data-center opportunity.
Speaking to CNBC’s Jim Cramer last Wednesday, Haas said he was increasingly confident that Arm could meet Wall Street’s higher revenue expectations for its new data-center chip, known as the AGI CPU.
The purpose-built processor is designed for agentic AI workloads and represents a significant expansion of Arm’s traditional business model.
The company first disclosed visibility into approximately $2 billion of demand for the AGI CPU during its May earnings call.
That figure was twice the $1 billion of demand Arm had previously outlined when it announced the CPU in March.
Cramer says multi-year chip shortage could support Arm
Cramer also offered a positive assessment of Arm during the September 16 episode of Mad Money, while discussing the stock’s recent pullback.
“The whole AI data center cohort peaked in June, then most of them bottomed near the end of July before rebounding like crazy. Some of the stocks are still off their highs. Arm Holdings, major chip design company, now also makes its own CPUs.”
Cramer noted that Arm had reached $452 in June before falling to just under $244, a decline of about 46% from that level at the time of his comments.
“But I don’t think you should look at it like that,” Cramer said, arguing that investors should instead consider the stock’s performance over a longer period.
“People are worried about a self-imposed slowdown in the data center coming from the big frontier AI labs, which is why ARM got slammed on Monday, but I think we’re looking at a multi-year chip shortage regardless,” Cramer said.
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