By Juby Babu and Max A. Cherney <\/p>\n
July 29 (Reuters) – 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. <\/p>\n
Arm \u200cshares were choppy in after-hours trading and down about 0.8%. <\/p>\n
Demand for Arm’s chip architecture has surged as \u200ccompanies such as Alphabet and Amazon.com build custom AI chips, boosting the company’s licensing revenue and royalties as more complex chips are shipped to \u200bdata centers. <\/p>\n
Arm sells intellectual property that other chip companies license and pay royalties on for each unit shipped, but has recently decided to make its own central processing unit for the data center. <\/p>\n
Higher demand from big tech company chips, along with new entrants such as Nvidia and its Vera processor, helped the company report higher-than-expected revenue, Arm CEO Rene Haas \u200ctold Reuters. Qualcomm also launched its C1000 \u2060data center chip, which does not contribute to Arm revenue now but will in the future, he said. <\/p>\n
Haas said the company has shipped 1.5 billion Arm cores \u2014 an important data-crunching \u2060portion of each chip \u2014 in the last six years, but about 30% were shipped in the last nine months. <\/p>\n
“Growth is accelerating,” Haas said. <\/p>\n
Revenue from royalties rose 22% to $715 million in the first quarter, while licensing revenue increased 23% to $574 million. <\/p>\n
POWER-EFFICIENT DESIGNS <\/p>\n
Arm’s \u200bchip designs \u200bare prized for their power efficiency, a critical advantage for \u200bdata center operators looking to manage the soaring \u200cenergy costs and heat generated by running massive AI models. <\/p>\n
Its AGI CPU, a new AI data center chip unveiled in March, is exceeding initial expectations, with demand surpassing $2 billion across fiscal years 2027 and 2028, the company said. It has already delivered the product to multiple customers. <\/p>\n
Cloud firm Oracle has agreed to buy the new chip, Haas said. The CEO did not disclose the contract value. <\/p>\n
“We have new customers in North America and China,” Haas said, adding \u200cthat the company can now secure supply for more than $1 billion \u200bworth of chips. <\/p>\n
“I feel better about (supply) than I did 90 days \u200bago,” he said. <\/p>\n
Jefferies analysts forecast sales of the \u200bnew chip reaching $18 billion in fiscal 2031, surpassing the chip designer’s own projection of $15 billion. \u200cHaas said the company was not changing any \u200bforecasts on Wednesday. <\/p>\n
Arm projected second-quarter \u200brevenue of $1.38 billion, above analysts’ average estimate of $1.34 billion, according to data compiled by LSEG. <\/p>\n","protected":false},"excerpt":{"rendered":"By Juby Babu and Max A. Cherney July 29 (Reuters) – Arm Holdings forecast second-quarter revenue above Wall…\n","protected":false},"author":2,"featured_media":565860,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,48957,343,344,18815,3132,85,46,125],"class_list":["post-565859","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-arm-holdings","tag-artificial-intelligence","tag-artificialintelligence","tag-chip","tag-data-centers","tag-il","tag-israel","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/565859","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=565859"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/565859\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/565860"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=565859"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=565859"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=565859"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}