Arm Holdings and Dell confirm AI infrastructure supercycle after Nvidia earnings beat; SOXX +0.85%

Arm Holdings plc (NASDAQ: ARM) surged 16.2% to $298.23, its second consecutive double-digit gain, after markets absorbed NVIDIA Corp.'s (NASDAQ: NVDA) blockbuster fiscal first-quarter results and repriced the chip licensing model sharply higher. Dell Technologies Inc. (NYSE: DELL) added 4.1% as investors revisited the company's fiscal 2026 AI-server record against Nvidia's own accelerating demand signals. The Philadelphia Semiconductor Index (SOXX) advanced 0.85%, well ahead of the broader market; the S&P 500 gained 0.17% and the Nasdaq Composite edged up 0.09%.

Today's biggest movers

Arm's two-day run: 34% in 48 hours as Nvidia validates the chip licensing model

Arm Holdings capped a stunning 48-hour sequence on Thursday, adding a further 16.2% to close at $298.23 and bringing its cumulative two-session gain to roughly 34%. The catalyst is Nvidia's fiscal first-quarter FY2027 results, released after Wednesday's close, which showed revenue of $81.6 billion against a consensus of $78.9 billion, with net income of $58.3 billion versus analyst estimates of $42.9 billion. For ARM, the implications are structural: every Nvidia Grace Blackwell server CPU running at scale carries ARM architecture royalties, meaning per-unit licensing revenue grows in direct proportion to AI silicon deployment. Wednesday's 15% ARM rally on AGI CPU architecture developments primed the stock; Nvidia's numbers confirmed the thesis.

Analyst consensus has moved decisively bullish. Twenty-three of 28 covering firms carry a Buy or equivalent rating, with street price targets lifted to an average of $218.35 in recent sessions. Wells Fargo analyst Joe Quatrochi raised his target to $220 from $175, maintaining an Overweight rating and citing ARM's "AI infrastructure positioning" as the core rationale. Goldman Sachs, Mizuho, Barclays, and Evercore ISI have also revised targets higher. ARM now trades well above the consensus target, which historically signals either stretched valuation or the opening of another round of estimate revisions from the buy side.

Dell's AI server machine: $9 billion in a single quarter, $142 billion guided for FY2027

Dell Technologies jumped 4.1% to $252.80 as Nvidia's demand signals reinforced the bull case for AI server infrastructure. Dell's fiscal fourth-quarter 2026 results, reported earlier this year, showed revenue of $33.4 billion, 5.4% ahead of the $31.7 billion consensus and up 39% year over year. AI-optimized server revenue reached $9.0 billion in that quarter, up 342% year over year, with Dell closing more than $64 billion in AI server orders across the full fiscal year and shipping more than $25 billion. The company entered fiscal 2027 carrying a record $43 billion backlog. Full-year fiscal 2026 revenue reached $113.5 billion.

Management guided fiscal 2027 revenue to $138.0 to $142.0 billion, with AI-optimized server revenue expected at approximately $50.0 billion, a roughly 70% step-up from fiscal 2026 levels. The H200 export clearance that drove last week's sector rally adds a further tailwind, as Dell is among the primary assemblers of Nvidia-based compute clusters for U.S. hyperscalers and enterprise buyers. With DELL up 97.8% year to date, the central question heading into fiscal 2027 is whether $50 billion in AI server revenue represents a floor or a ceiling.

Software diverges: MongoDB slips on pre-earnings caution, ServiceNow extends year-long slide

MongoDB Inc. (NASDAQ: MDB) shed 3.5% to $317.50 as investors trimmed positions ahead of its first-quarter fiscal 2027 earnings report on May 28 after market close. Options markets imply a move of up to 15% in either direction following the release, according to Bloomberg data. Bank of America carries a $375 price target, and 30 of 30 covering analysts hold Buy or equivalent ratings; the consensus target was recently raised from $272 to $312. Analysts project first-quarter revenue of roughly $1.4 billion, representing approximately 18.5% growth year over year, with Atlas cloud momentum and AI-workload database demand as the primary growth drivers.

ServiceNow Inc. (NYSE: NOW) fell 3.5% to $99.69 after Citic Securities cut its price target on the stock Thursday. The session extends a painful 2026 for shareholders: NOW has shed more than 32% year to date. The company's first-quarter 2026 earnings showed 22% subscription revenue growth and a guidance raise, but shares fell sharply in response as analysts flagged macro delays in closing large on-premise deals and margin pressure from integration costs. Despite the decline, 47 analysts polled by S&P Global maintain a Strong Buy consensus with an average price target of $143.06, implying substantial upside if the macro backdrop stabilizes.

Lam Research and Datadog add to the AI infrastructure rally

Lam Research Corp. (NASDAQ: LRCX) gained 3.5% to $302.24, one of the chip-equipment sector's cleaner expressions of the Nvidia demand signal. In its April fiscal third-quarter earnings call, Lam reported its first $2 billion quarter from the Customer Support Business Group and raised its 2026 global wafer fabrication equipment market estimate to $140 billion from the $135 billion floor set in January. With AI driving sustained demand for advanced NAND and DRAM layers, Lam's etch-and-deposition equipment sits at a structural bottleneck in the supply chain.

Datadog Inc. (NASDAQ: DDOG) rose 2.7% to $218.04. The monitoring and analytics platform reported first-quarter 2026 revenue of $1.006 billion, up 32% year over year, on May 7, with analysts highlighting record customer retention rates and a nearly 6% upward revision to full-year guidance. The company's consumption-based pricing model is increasingly cited as well-suited to the AI-agent economy, where GPU utilization and token throughput create measurable, billable observability events. A median analyst price target of $215 has already been surpassed.

Notable but quieter

ASML Holding N.V. (NASDAQ: ASML) added 2.7% to $1,592.00, its second consecutive positive session, following remarks from the company's chief executive that the chip market will remain supply-tight for years, with global semiconductor revenue on track toward $1.5 trillion by 2030. UBS named ASML its top European semiconductor pick this week. The stock is up 36.8% year to date.

Palo Alto Networks Inc. (NASDAQ: PANW) gained 2.5% to $252.92 ahead of its fiscal third-quarter earnings call on May 26. Investors have lifted the stock 41% year to date, expecting evidence that the platform-consolidation strategy continues to displace point-product competitors in large enterprise accounts.

Baidu Inc. (NASDAQ: BIDU) fell 3.0% to $131.18. The company reported first-quarter 2026 results on May 18, disclosing that AI-powered revenue has crossed 50% of Baidu General Business for the first time and that AI Cloud Infrastructure delivered strong enterprise demand growth. Thursday's softness tracked reports that Kunlunxin, Baidu's AI chip unit, has engaged China International Capital Corp ahead of a planned STAR Market listing, a process observers expect to conclude in the third quarter.

Nvidia slipped 1.8% to $219.51 despite its record first-quarter FY2027 revenue of $81.6 billion and net income of $58.3 billion, as a sell-the-news dynamic prevailed; some traders noted fiscal second-quarter guidance did not reach the very top of buy-side estimates. Salesforce Inc. (NASDAQ: CRM) fell 2.1% to $176.31 as investors positioned cautiously ahead of the company's earnings release on May 27.

What to watch next week

The AI-sector earnings calendar is dense. Palo Alto Networks reports fiscal third-quarter results on May 26. Salesforce follows on May 27 and MongoDB on May 28 after market close, the latter carrying the largest implied options move in the software cohort at up to 15%. Investors will also track any further developments in U.S. export-control policy toward advanced chips, following the H200 clearance that contributed to last week's sector rally, and any Federal Reserve commentary ahead of the June 11 policy decision.

Not investment advice.