Arm shares continue astonishing rise after AI boost fuels Q3 revenue to $824m
Arm’s revenue for the three months to the end of December trounced expectations with a tally of $824million, up 14 per cent year-over-year, thanks largely to increased investment in AI across all end markets.
The results, the second since the chip designer’s Nasdaq listing in December, boosted Arm’s share value by almost 50 per cent, valuing the company at $117bn, up from $65bn when the company went public.
Q3 growth was driven by both royalty revenue and license revenue, Arm announced in a public letter.
Royalty revenue was up 11 per cent year-on-year to $470million, driven by the semiconductor industry recovery and the rapidly increasing penetration of Armv9-based chips, which typically command a higher royalty rate.
At $354million, license revenue was better than expected, up 18 per cent year-over-year, and strong bookings were due to strong demand for more advanced Arm CPUs for AI use.
Arm signed five new licensing agreements for its Total Access product in Q3 – the total number of extant licences is now 27 – and added six net clients to its Flexible Access programme.
“Arm delivered another quarter of record revenues driven by continued adoption of the world’s most pervasive compute platform,” said Rene Haas, Arm CEO. “More customers moving to higher-value Armv9 technology combined with market share gains in cloud server and automotive resulted in strong royalty growth.
“The AI wave drove licensing growth as these new devices require Arm’s performant and power-efficient compute platform.”
Arm’s stock has continued to rise following the publication of the letter: shares of Arm Holdings surged more than 40 per cent on Monday (February 13), fueled by the optimism around AI.
The stock traded up 21 per cent at $139.65 after reaching a high of $164, 42 per cent above its close on Friday.
With this week’s jump, Arm's shares have gained more than 80 per cent since the British tech company, making the Cambridge company Wall Street's newest AI-related darling.
