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22h ago

Arm Shares Slide on Softer Guidance as It Shifts Into Chipmaking

CEO Rene Haas said the company will move beyond licensing into chip design followed by manufacturing to pursue AI-driven growth.

Rene Haas, CEO of chip tech provider Arm Holdings, holds a replica of a chip with his company's logo on it, during an event in which Malaysia's Prime Minister Anwar Ibrahim officially announces a $250 million deal with the company, in Kuala Lumpur, Malaysia March 5, 2025. REUTERS/Hasnoor Hussain/File Photo
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A smartphone with a displayed Arm Ltd logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/ File Photo
Arm Holdings, which started in Cambridge, also has headquarters in Silicon Valley

Overview

  • Arm reported fiscal first-quarter revenue of $1.05 billion, just under the $1.06 billion analysts anticipated, and adjusted earnings per share of $0.35 matched forecasts.
  • It projected second-quarter profit of $0.29 to $0.37 per share, below the $0.36 consensus, triggering an 8% drop in after-hours trading.
  • CEO Rene Haas confirmed a strategic pivot to develop its own chiplets and complete processor solutions, setting it up as a supplier-turned-competitor to companies like Nvidia.
  • Global trade tensions and a saturated smartphone market have clouded the outlook for Arm’s core licensing royalties despite its 99% share of smartphone processors.
  • To diversify revenue, Arm is pursuing data center opportunities through partnerships with cloud providers such as Amazon Web Services.