Key Stats for Arm Holdings Stock
- Pre-market Price Change for Arm Holdings stock: 5.6%
- $ARM Share Price as of Nov. 5: $160
- 52-Week High: $183
- $ARM Stock Price Target: $158
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What Happened?
Arm Holdings (ARM) stock is up nearly 6% in pre-market trading after the chip designer reported second-quarter results that exceeded expectations and issued strong third-quarter guidance, driven by the AI computing boom.
The company reported revenue of $1.14 billion, a 34% increase year-over-year and exceeding analyst estimates of $1.06 billion. Earnings came in at $0.22 per share, easily beating the $0.13 consensus. This marked Arm’s third consecutive quarter with revenue above $1 billion.
For the current quarter, Arm guided to $1.23 billion in revenue at the midpoint, which is significantly higher than Wall Street’s estimate of $1.1 billion.
CEO Rene Haas told investors that demand for the company’s Compute Subsystems products, as well as broader AI spending, fueled the optimistic outlook.
Royalty revenue hit a record $620 million, up 21% from last year, with growth across smartphones, data centers, automotive, and IoT.
The company’s data center royalties more than doubled year-over-year as hyperscalers, including Google, Amazon, and Microsoft, ramped up their Arm-based chip deployments.
Licensing revenue surged 56% to $515 million, driven by the timing of high-value contracts and expanded design services agreements with SoftBank and other partners.
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What the Market Is Telling Us About ARM Stock
The strong reaction in ARM stock shows investors are increasingly confident in the company’s positioning within the AI infrastructure buildout.
Haas emphasized that power consumption has become the major bottleneck for data centers, which plays directly to Arm’s strengths in energy-efficient chip designs.
Google’s Arm-based Axion processors deliver 60% better energy efficiency than comparable Intel or AMD chips, according to the company. This efficiency advantage is driving rapid adoption, with Arm expecting its share of CPUs in top hyperscale data centers to hit nearly 50% in 2025.
The 19 Compute Subsystems licenses signed across 11 companies represent a meaningful shift in Arm’s business model.
These more complete chip designs generate higher royalties and faster time-to-market for customers. Samsung’s latest Exynos chips, which utilize CSS technology, deliver 40% better AI performance than previous generations.
Haas also confirmed that the company continues to explore building its own chips rather than just licensing designs—a potential game-changer that could open up new revenue streams beyond traditional licensing and royalties.
With AI driving unprecedented compute demand and power efficiency becoming critical, Arm appears well-positioned to capture a significant share in the data center market while maintaining its smartphone dominance.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
