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 \u200cits energy-efficient chip designs for AI data centers. <\/p>\n
Demand for Arm’s chip architecture has \u200csurged as companies like Alphabet and Amazon.com build custom AI chips, boosting the company’s licensing revenue and \u200broyalties as more complex chips are shipped to data centers. <\/p>\n
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. <\/p>\n
Arm’s chip designs are prized for their power efficiency, \u200ca critical advantage for data \u2060center operators looking to manage the soaring energy costs and heat generated by running massive AI models. <\/p>\n
Its AGI CPU, a new AI \u2060data 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 \u200bmultiple \u200bcustomers. <\/p>\n
Cloud firm Oracle has agreed to buy the \u200bnew chip, Arm CEO Rene Haas \u200csaid in an interview with Reuters. Haas did not disclose the contract value. <\/p>\n
“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. <\/p>\n
“I feel better about (supply) than I did 90 days ago,” he said. <\/p>\n
Jefferies analysts see sales of the new chip \u200creaching $18 billion in fiscal 2031, surpassing the chip \u200bdesigner’s own projection of $15 billion. Haas said the company is \u200bnot changing any forecasts on Wednesday. <\/p>\n
Arm \u200bprojected second-quarter revenue of $1.38 billion, above analysts’ average estimate of $1.34 billion, \u200caccording to data compiled by LSEG. <\/p>\n
The \u200bUK chip designer expects \u200bsecond-quarter profit of 47 cents per share, adjusted for stock compensation, among other things, compared with analysts’ expectations of 43 cents per share. <\/p>\n
The company reported revenue \u200bof $1.29 billion and adjusted per-share \u200cearnings of 45 cents for the first quarter. Analysts expected revenue of $1.26 \u200bbillion and adjusted profit of 40 cents a share. <\/p>\n
(Reporting by Juby Babu \u200bin Mexico City; Editing by Sahal Muhammed) <\/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":550142,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,56836,363,364,3028,8558,111,139,69,145,78616],"class_list":["post-550141","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-new-zealand","tag-newzealand","tag-nz","tag-technology","tag-wall-street-estimates"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/550141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=550141"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/550141\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/550142"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=550141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=550141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=550141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}