Arm and Snowflake Stock Movers Highlight Key Tech Trends on May 28

Shares of Arm Holdings and Snowflake were notable market cap movers in Thursday's trading session on May 28, 2026. The moves underscore divergent investor sentiment toward two pivotal names in the technology sector. Data from investing.com captured the price action. Arm shares added 4.2%, extending a rally fueled by sustained demand for its chip designs in AI data centers. Snowflake shares declined 3.8%, continuing a recent pattern of underperformance amid concerns over enterprise cloud spending and competitive pressures. The combined market cap swing between the two companies exceeded $15 billion.

Context — [why this matters now]

The divergent performance of Arm and Snowflake reflects a broader market rotation within the technology sector. This rotation is occurring against a backdrop where the Federal Reserve's policy rate remains at 4.75% after its last hike in late 2025. The 10-year Treasury yield has stabilized near 4.4% over the past month, providing a clearer, albeit elevated, discount rate environment for growth stocks.

The immediate catalyst for Arm's strength is a series of new licensing agreements with major cloud providers. These deals, announced over the prior week, signal accelerating adoption of Arm's energy-efficient architecture for AI inference workloads. For Snowflake, the catalyst is more negative. Its quarterly results, released on May 25, showed a deceleration in product revenue growth that missed consensus estimates.

A historical comparable exists in the performance of Intel versus NVIDIA in the 2020-2023 AI boom. NVIDIA's surge, driven by its data center GPU dominance, saw its market cap exceed Intel's by a factor of 10 by late 2023. This mirrored a shift in computing paradigm from general-purpose CPUs to specialized accelerators, a trend now benefiting Arm in the inference layer.

Data — [what the numbers show]

Arm Holdings closed the session at $158.75, a gain of $6.40 or 4.2%. The stock has now risen 42% year-to-date, significantly outperforming the Nasdaq 100 index, which is up 11% over the same period. Arm's market capitalization increased by approximately $9.8 billion on Thursday, reaching roughly $240 billion.

Snowflake shares closed at $134.22, a decline of $5.32 or 3.8%. The stock is now down 18% from its 2026 high in February. Its market cap declined by approximately $5.3 billion on the day to around $43 billion.

Metric	Arm Holdings (ARM)	Snowflake (SNOW)
Price Change (28 May)	+4.2%	-3.8%
Market Cap Change ($B)	+$9.8	-$5.3
YTD Performance	+42%	-12%

Peer comparisons highlight the divergence. The iShares Semiconductor ETF (SOXX) is up 28% YTD, while the First Trust Cloud Computing ETF (SKYY) is down 3%. This underscores the market's preference for hardware enablers of AI over pure-play software-as-a-service models facing margin pressure.

Analysis — [what it means for markets / sectors / tickers]

The moves have direct second-order effects across related tickers and sectors. Chip equipment makers like Applied Materials and ASML are indirect beneficiaries of Arm's growth, as its designs require advanced manufacturing. Both stocks traded up 1.5% and 2.1%, respectively, on the session. Conversely, legacy database providers like Oracle and MongoDB, which compete with Snowflake in data warehousing, saw mixed reactions. Oracle gained 0.8%, while MongoDB slipped 1.2%, indicating the selloff may be specific to Snowflake's execution.

A key counter-argument is that Arm's valuation now embeds significant future perfection. At a forward price-to-earnings ratio exceeding 60, any stumble in AI adoption timelines could trigger a sharp correction. For Snowflake, the bear case focuses on rising competition from hyperscalers' native tools and Databricks. However, the bull case notes its massive remaining data monetization opportunity, with over 10,000 enterprise customers.

Positioning data from options markets shows increased call buying in ARM, targeting strikes above $170 for June expiration. For SNOW, the put/call ratio spiked to 1.8, its highest level in three months, indicating elevated hedging or bearish speculation among active traders. Institutional flow tracking suggests net selling in software ETFs and rotation into semiconductor funds.

Outlook — [what to watch next]

Two immediate catalysts will shape the near-term path for these stocks. First is Nvidia's earnings report scheduled for June 4. As the dominant AI hardware player, its guidance on data center spending will heavily influence sentiment toward Arm and the entire semiconductor supply chain. Second is the PCE inflation data release on May 30, which will inform the Fed's rate path and pressure growth stock valuations broadly.

Key technical levels provide clear risk parameters. For Arm, initial support rests at its 20-day moving average near $148. A sustained break above $160 could target the $175 zone. For Snowflake, the $130 level is critical psychological and technical support, representing the 2025 lows. A break below could signal a retest of $115.

Watch for commentary from cloud infrastructure CEOs at the upcoming Bernstein Strategic Decisions Conference on June 5-6. Their capital expenditure plans for the second half of 2026 will be pivotal for both Arm's design win pipeline and Snowflake's consumption volumes.

Frequently Asked Questions

How does Arm make money from AI chips?

Arm generates revenue through upfront licensing fees for its chip architecture blueprints and ongoing royalties for every chip shipped that uses its designs. For AI, its newer Neoverse and Cortex-X designs are licensed to companies like Amazon, Google, and Nvidia for use in data center CPUs and custom AI accelerators. Royalty rates typically range from 1% to 2% of the chip's selling price, creating a high-margin, scalable revenue stream as AI chip volumes grow.

Is Snowflake's slowdown a sign of broader cloud weakness?

Snowflake's deceleration is partly company-specific, tied to its consumption-based pricing model and heightened competition. However, it also reflects a broader enterprise focus on optimizing existing cloud spend, known as FinOps, rather than greenfield expansion. Microsoft Azure and Amazon AWS reported cloud revenue growth of 22% and 17% year-over-year in their latest quarters, indicating the infrastructure layer remains resilient even as some application-layer software vendors face headwinds.