Arm Holdings Reports Strong Q2 Earnings Amid AI Growth, Shares Dip on Conservative Forecast

Despite beating quarterly expectations, Arm's shares fell due to a revenue forecast that aligned with but did not exceed analyst predictions.

Arm Holdings reported a 5% year-over-year revenue increase to $844 million for its fiscal Q2 2025, surpassing analyst expectations.
The company's royalty revenue surged by 23%, driven by the adoption of its Armv9 technology in smartphones, outpacing smartphone shipment growth.
Despite strong earnings, Arm's shares fell by up to 6% as investors were unimpressed by the revenue forecast for the next quarter, which was in line with analyst estimates.
Arm is focusing on AI opportunities across various sectors, including datacenters and mobile devices, as a key growth area for its chip designs.
The company expects full fiscal year 2025 revenue between $3.8 billion and $4.1 billion, representing an 18-27% increase compared to the previous year.