SAN FRANCISCO: Arm Holdings forecast third quarter revenue marginally ahead of Wall Street estimates as the company continues to benefit from the boom in artificial intelligence (AI) spending.
Arm shares were choppy in the extended session on Wednesday, falling about 1% as the conference call with analysts began.
Demand for Arm-based technology has benefitted from the AI boom, as major cloud companies develop custom processors for data centre workloads.
Arm’s architecture is prized for its power efficiency, an increasingly important factor as operators seek to rein in the energy and cooling costs of running large AI models.
“We’re just seeing huge pickup for all technology around the data centre space,” Arm chief executive officer Rene Haas said.
The company now expects it will sell U$2bil worth of its central processing unit (CPU), the Arm General Infrastructure (AGI) CPU, in its fiscal years 2027 and 2028.
The company has worked with Taiwan Semiconductor Manufacturing Company and other chip suppliers to secure enough raw materials to produce the US$2bil worth, Haas said. “We think the two billion is now very achievable.”
A memory shortage has gripped the chip industry this year but Haas said Arm was able to secure enough supply to make the US$2bil worth of AGI CPUs, which use a speedy form of dynamic random access memory (DRAM).
Prior to this year, Arm sold its designs, but in March it announced that it was getting into the complete chip business and had US$1bil worth of orders for the AGI CPU at launch.
Unlike chipmakers that manufacture semiconductors, Arm Holdings licences its processor architecture and earns royalties on chips shipped using its technology, making licencing fees and royalty payments the company’s primary sources of revenue.
Arm said its server-chip architecture accounted for more than 50% of deployments at major cloud providers in 2025 and is expected to exceed 60% by the end of 2026.
Arm is able to take market share from x86-based designs made by Intel and Advanced Micro Devices in standard CPU server racks that companies such as Oracle use in their data centres, Haas said. — Reuters
