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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wolf who wrote (196470)	11/5/2025 5:03:17 PM
From: Bill Wolf	1 Recommendation Recommended By Dr. John Respond to of 196772

Arm Gives Bullish Forecast, Pointing Toward AI Demand Surge By Ian King November 5, 2025 at 4:04 PM EST Updated on November 5, 2025 at 4:23 PM EST Arm Holdings Plc, which provides the most widely used technology in computing processors, gave a bullish revenue forecast, helped by increasing interest in designing chips to run AI data centers. Fiscal third-quarter revenue will be about $1.23 billion, the company said Wednesday in a statement. Profit will be 41 cents a share, excluding certain items. Those targets compare with analysts’ average estimates of 35 cents a share on sales of $1.1 billion. The outlook signals that Arm is beginning to see increasing rewards from investment in new technology aimed at winning a place in data centers that are being built to support artificial intelligence computing. Under Chief Executive Officer Rene Haas, the UK-based company has been transforming itself into a provider of more complete designs, raising its profile and revenue potential. The transition has required more engineering efforts, and the consequent increase in spending has eaten into profitability. It has also made Arm more of a rival for some of its biggest customers. The company is still involved in a bitter legal dispute with Qualcomm Inc. “This is continued strong demand for the technology across the board, in particular in the data center,” Haas said in an interview. Revenue from the Arm’s Neoverse product used in computers had doubled, he said. More broadly, Arm is reporting in an earnings season in which investors are focusing on the returns that companies are getting from their investment in AI, amid increasing concern that current levels of spending are unsustainable. Arm’s majority owner, SoftBank Group Corp., is trying to insert itself into the broader AI narrative, including by participating in OpenAI’s Stargate AI project. Haas has said that Arm’s products will be a part of such efforts, but hasn’t yet fully disclosed what type of chips the company will be providing. Arm gets paid in two ways: licenses that let customers use its designs and standards, and royalties paid per unit when the resulting chips are shipped. Arm shares rose about 4.5% in extended trading after closing at $160.19 in New York. While the stock has gained 30% this year, it lags behind a surge in other chip stocks buoyed by optimism about AI demand. In the fiscal second quarter, revenue increased 34% to about $1.14 billion, the company said. Profit was 39 cents a share in the period, which ran through September. Licensing revenue was $515 million, compared with an average estimate of $472 million. Royalty contributed $620 million. Analysts, on average, projected $586 million. Arm’s technology made its breakthrough in mobile devices because it was designed from the ground up to be the basis of chips that can get by in a battery-powered environment. That market has traditionally provided the company with the bulk of its revenue. Now that data centers are increasingly becoming power-constrained, the company believes it has a role in that lucrative business and is increasing design work on behalf of companies such as Amazon.com Inc. and Alphabet Inc.’s Google. (Updates with comments from CEO in the fifth paragraph.) bloomberg.com