SAN FRANCISCO: Chip technology provider Arm Holdings is giving a third-quarter of financial year 2025 (3Q25) forecast topping Wall Street’s expectations, boosted by the boom in artificial intelligence (AI) computing.
Shares of Arm rallied 5% immediately after the report but retraced gains within minutes and were up about 3%.
For the current quarter, Arm forecast revenue of US$1.23bil at the midpoint of its guidance, which exceeded the average analyst estimate of US$1.1bil, according to London Stock Exchange data.
The Compute Subsystems products sold by Arm generate higher royalties than the company’s other designs and the number of customers that have adopted CSS tech and AI spending in general contributed to the company’s bullish forecast, chief executive officer Rene Haas told Reuters in an interview.
The CSS products are more complete chip designs that have allowed companies to make a full chip more quickly.
“When we think about what’s going on with Arm in the data centre, we then kind of go back to all of this demand for AI compute – the bottleneck is power,” Haas said.
“That’s a good thing for us.”
Arm’s 2Q25 revenue rose 34% to US$1.14bil, higher than analyst estimates of US$1.06bil. The UK chip company reported 2Q25 earnings of 39 US cents per share, adjusted for stock-based compensation, among other things. Analysts expected earnings of 33 US cents a share.
Arm generates revenue from licensing fees for its semiconductor designs and collects a royalty for each chip sold that uses its technology. — Reuters
