Arm forecasts quarterly revenue above estimates on AI-driven chip demand

The company reported revenue of **$1.29 billion** and adjusted per-share earnings of **45 cents** for the first quarter. Analysts expected revenue of **$1.26 billion** and adjusted profit of **40 cents a share**. Arm Holdings forecast second-quarter revenue above Wall Street estimates on Wednesday, signaling strong demand for its energy-efficient chip designs for AI data centers. Arm projected second-quarter revenue of **$1.38 billion**, above analysts' average estimate of **$1.34 billion**, according to data compiled by LSEG. The UK chip designer expects second-quarter profit of **47 cents per share**, adjusted for stock compensation, among other things, compared with analysts' expectations of **43 cents per share**. Its AGI CPU, a new AI data center chip unveiled in March, is exceeding initial expectations, with demand now surpassing **$2 billion** across fiscal years 2027 and 2028, the company said. It has already delivered the product to multiple customers. Cloud firm Oracle has agreed to buy the new chip, Arm CEO Rene Haas said in an interview with Reuters. Haas did not disclose the contract value. "We have new customers in North America and China," Haas said, adding that the company can now secure supply for more than **$1 billion** worth of chips. "I feel better about (supply) than I did 90 days ago," he said. Jefferies analysts see sales of the new chip reaching **$18 billion** in fiscal 2031, surpassing the chip designer's own projection of **$15 billion**. Haas said the company is not changing any forecasts on Wednesday. Demand for Arm's chip architecture has surged as companies like Alphabet and Amazon.com build custom AI chips, boosting the company's licensing revenue and royalties as more complex chips are shipped to data centers. Revenue from royalties, which Arm collects on each chip shipped using its technology, rose **22% to $715 million** in the first quarter, while licensing revenue grew **23% to $574 million**. Arm's chip designs are prized for their power efficiency, a critical advantage for data center operators looking to manage the soaring energy costs and heat generated by running massive AI models.

Arm forecasts quarterly revenue above estimates on AI-driven chip demand

First-quarter results

Second-quarter outlook tops estimates

AGI CPU demand exceeds early expectations

AI chip demand boosts licensing and royalties

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