Arm Stock Surges on Strong Q2 Earnings and AI Data Center Growth
Arm Holdings' shares jumped 7% after reporting fiscal Q2 revenue of $1.14 billion, surpassing expectations. The chip designer's Q3 revenue guidance of over $1.23 billion and projected earnings of 41 cents per share both exceeded Wall Street forecasts.
The company's pivot toward AI data centers is paying dividends. Licensing revenue hit $515 million (versus $472M estimates) while royalties reached $620 million ($586M expected). This dual revenue model—charging for chip designs and collecting per-unit royalties—positions Arm uniquely as companies invest heavily in AI infrastructure.
CEO Rene Haas is successfully expanding Arm beyond mobile chips into wearables and supercomputers. Despite ongoing legal battles with Qualcomm, the 34% annual revenue growth demonstrates the strategic shift's momentum.
