ARM reported blockbuster earnings after the close on Wednesday, also giving a ringing endorsement of what it views as the extraordinary potential of AI.

ARM is a heavyweight company, with a market cap of about $75 billion, pre-earnings. Its software has been essential over the last quarter-century+ in allowing the separation between chip design and chip manufacture. This, in turn, has allowed design firms and foundries to flourish–at the expense of integrated firms like Intel. All this means ARM is an important entity for technology-oriented stock market investors to be aware of. The only possible fly in the ointment is the connection with Softbank and Masayoshi Son, who has long since lost the Midas touch he had in his early business days in the software business in Asia the 1980s and 1990s.

Anyway, what shocked me is that ARM was up by 47.9% yesterday on the earnings news. That’s more than NVDA has gained year-to-date. 

What this move says to me is that Wall Street analysts were completely in the dark about what’s happening with the company. How can this be? My perhaps too facile answer is that Wall Street has shifted from anticipation–the result of investigation and analysis by a cadre of securities analysts–to rapid reaction by trading bots. Why do this? …because it’s cheaper, and if everyone is doing the same thing, there isn’t a lot of downside.

So much the better for you and me.