Arm Holdings forecast third-quarter revenue of $1.54 billion, marginally above the average analyst estimate of $1.53 billion, citing continued demand linked to the artificial intelligence boom.
The company’s processor architecture is gaining traction as major cloud providers develop custom chips for data-center workloads. Arm’s focus on power efficiency is also relevant as operators look to manage the energy and cooling costs of running large AI models. CEO Rene Haas told Reuters that demand for technology used in data centers had increased sharply.
Arm said its server-chip architecture accounted for more than half of deployments at major cloud providers in 2025 and could exceed 60% by the end of 2026. Haas said Arm-based designs are taking share from x86 processors made by Intel and AMD, and are increasingly used in AI servers to help manage data flows. Google has started using its Arm-based Axion chips in its tensor processing unit systems.
The company also expects to sell $2 billion worth of its AGI central processing units across fiscal 2027 and 2028. Haas said Arm had worked with TSMC and other suppliers to secure the materials needed to meet that target, despite a shortage of memory chips. Arm began selling complete chips in March, after previously focusing on licensing its designs, and had $1 billion in AGI CPU orders at launch.
For its second quarter, Arm reported revenue of $1.44 billion, above the $1.38 billion analyst estimate compiled by LSEG. Adjusted earnings were 52 cents per share, compared with expectations of 47 cents. Licensing revenue reached $773 million, beating the $625.1 million estimate, while royalty revenue rose 8% to $670 million, below the $720.8 million forecast.
Arm shares fluctuated in extended trading on Wednesday and were down about 1% as the company’s analyst conference call began. The company primarily earns revenue through licensing fees and royalties on chips that use its processor technology.
Sources: Investing.com News.