Arm Gains From Nvidia’s $20B Vera CPU, Unlocking $200B Data-Center TAM
Nvidia visibility for $20 billion of Arm-based Vera CPU revenue this year opens a $200 billion data-center market for Arm royalties. Arm holds 50% hyperscaler CPU share and anticipates royalty growth near 20% this year, with AGI CPU revenue poised to climb from $1 billion in FY28 to $15 billion by FY31.
1. Nvidia Sees $20B Vera CPU Revenue and $200B TAM
Nvidia projects $20 billion in standalone Vera CPU sales this year, creating a new $200 billion total addressable market for Arm-based data-center processors. Jefferies has maintained its Buy rating on Arm with a $290 price target, citing this visibility as a key catalyst for royalty growth.
2. Hyperscaler Share and Royalty Outlook Strengthen
Arm has secured a 50% share of the hyperscaler CPU market through Grace-based deployments, Graviton solutions and the Axion lineup. With Vera-Rubin launches and standalone Vera shipments, Arm expects to approach 60% market share, driving royalty growth of around 20% this year despite lower per-unit rates.
3. AGI CPU Opportunity Poised for Upside
Arm’s guidance anticipates AGI CPU revenue rising from $1 billion in FY28 to $15 billion by FY31, though Jefferies forecasts $1.4 billion in FY28 and believes the long-term total addressable market may be closer to $200 billion. The investment thesis is increasingly focused on accelerating AGI CPU adoption rather than licensing alone.