Arm Stock Soars 7% as Q2 Revenue Hits $1.14B, Q3 Outlook Smashes $1.23B Forecast
Arm just delivered the kind of earnings report that makes traditional semiconductor investors forget their morning coffee.
Quarterly Revenue Explosion
Raking in $1.14 billion for Q2—then casually projecting over $1.23 billion for Q3. Because apparently, beating expectations is the new baseline.
Market Reaction
Traders sent shares surging 7% in early trading. Because nothing says 'we believe in your growth story' like a double-digit percentage jump before lunch.
Future Projections
The company's guidance doesn't just exceed forecasts—it practically rewrites them. Leaving analysts scrambling to update their models while institutional investors quietly increase their positions.
Meanwhile, somewhere in Silicon Valley, crypto developers are building the next decentralized computing platform that could make even these impressive numbers look quaint. But for now—enjoy those traditional market gains while they last.
Arm beats Q2 estimates as licensing, royalty revenue rise
For the fiscal second quarter, which ended in September, revenue ROSE 34% year over year. Arm reported profit of 39 cents per share, just two cents below next quarter’s forecast.
Out of that $1.14 billion in revenue, $515 million came from licensing, easily beating the $472 million average analyst estimate. Royalties brought in $620 million, also above the forecast of $586 million.
Arm gets paid in two ways: it charges for licenses to use its chip designs and collects a royalty each time one of those chips is shipped. That dual model has now become more valuable as companies pour cash into AI infrastructure.
Despite the strong beat, Arm is still locked in a legal fight with Qualcomm. The company’s push into full-stack chip design has turned it into a competitor for some of its longtime customers, which has also meant higher engineering expenses, which have put pressure on its margins. Still, Arm isn’t slowing down.
“Fiscal Q3 revenue will be about $1.23 billion, with profit of 41 cents per share,” the company said in its earnings release. Analysts had expected $1.1 billion and 35 cents, so this guidance sent investors scrambling to buy.
Arm’s parent company SoftBank is also chasing the AI wave. It’s reportedly part of OpenAI’s Stargate project, trying to plant itself in the middle of the global AI gold rush. While Haas confirmed that Arm products WOULD play a role, he didn’t say what kind of chips it plans to deliver.
AI chips in phones, PCs, cars drive Arm expansion
The company’s strategy is now to go far beyond smartphones. Arm chips are showing up in everything from Google’s Pixel 10 to Tesla’s future vehicles. Pixel 10 runs on the Arm-based Tensor G5, which Google says makes Gemini run 2.6x faster and twice as efficient compared to past chips.
On the PC side, NVIDIA’s DGX Spark, a desktop AI supercomputer, is now shipping with Arm-based processors. That hardware is being used for model training, fine-tuning, and inference; on the desk, not in the cloud.
Over in automotive, a flagship EV from a major automaker is now running entirely on Arm’s platform. And Tesla’s next-gen AI5 chip, built for both cars and robots, is based on Arm. Tesla says it delivers 40x the AI performance of the chip it replaces.
In October, Arm signed a strategic deal with Meta. That partnership links Neoverse CPU cores to Meta’s AI backbone, including Facebook and Instagram’s recommendation engines. Meta and Arm are now co-designing chips across the entire stack—from smart glasses to server farms.
Arm says the growing power demands in AI data centers match its legacy strength in low-power mobile chips. The company believes its energy-efficient designs will now scale from milliwatts in wearables to megawatts in AI server farms.
And Arm is already building custom designs for Amazon and Google, who are expanding their AI infrastructure.
Get $50 free to trade crypto when you sign up to Bybit now
