Arm Holdings Shares Soar 1.18% on Bullish Option Activity, Q2 Royalty Revenue Up 23%

Arm Holdings (ARM) shares surged 1.18% today, marking the second consecutive day of gains, with a total increase of 6.57% over the past two days. The stock price reached its highest level since February 2025, with an intraday gain of 3.39%.

The strategy of buying ARM shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years. The annualized return was 12.5%, with a total profit of 68.2%. This indicates that while the strategy captured some of the subsequent gains, it also revealed some vulnerabilities in the shorter-term volatility of ARM's stock price.

One of the key factors driving the recent surge in Arm Holdings' stock price is the significant increase in option activity. Call contracts have been trading at volumes that exceed expectations, indicating a bullish market sentiment. This surge in option activity suggests that investors are optimistic about the company's future prospects, which can positively influence the stock price.

Additionally, Arm Holdings' Q2 2025 royalty revenue saw a substantial increase of 23%, reaching $514 million. This growth is largely attributed to the widespread adoption of the Armv9 architecture, which is playing a crucial role in the AI innovation era. The company's involvement in AI technology is not only driving revenue growth but also enhancing its market position, which can further boost investor confidence and positively impact the stock price.