Home » Arm flies to Wall Street: +40% thanks to artificial intelligence chips

Arm flies to Wall Street: +40% thanks to artificial intelligence chips

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Arm flies to Wall Street: +40% thanks to artificial intelligence chips

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The shares of Arm Holdings are flying, gaining around 40% in the first hours of trading after the British technology company released forecasts for the fiscal fourth quarter of adjusted sales and profits above Wall Street’s expectations. Reason? Needless to say, customers are aiming to design new chips for artificial intelligence, generating higher royalties.

Arm’s fourth-quarter forecast calls for average sales of $875 million and adjusted earnings of 30 cents per share, above estimates of $780.3 million and 21 cents per share, according to LSEG data.

The surge in Arm stock has boosted its market capitalization by about $26 billion. The shares are currently trading around $105, a figure more than double the $51 of the initial public offering in September.

Arm raised its forecast by about $100 million because markets such as automotive and artificial intelligence will be strong in the fiscal fourth quarter, chief financial officer Jason Child told Reuters.

The company expects licensing revenue for chips that power artificial intelligence in data centers, phones and PCs to be a significant factor.

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