{"slug": "arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand", "title": "Arm Forecasts Q2 Revenue Above Estimates on AI Chip Demand", "summary": "Arm Holdings forecast second-quarter revenue of $1.38 billion, above Wall Street's $1.34 billion estimate, driven by surging demand for its chip blueprints in AI data centers. The British chip designer also beat first-quarter expectations with revenue of $1.29 billion and adjusted EPS of 45 cents, as royalty revenue rose 22% and licensing revenue grew 23%. CEO Rene Haas confirmed new customers in North America and China and said supply constraints have eased, while the company's AGI CPU has exceeded $2 billion in demand for fiscal 2027 and 2028.", "body_md": "**July 30, 2026**, (Inside AI) — **Arm Holdings** on Wednesday forecast second-quarter revenue of **$1.38 billion**, sailing past Wall Street's consensus estimate of **$1.34 billion**. The guidance signals that demand for its energy-efficient chip blueprints is accelerating as data center operators race to deploy custom silicon for artificial intelligence workloads.\n\nThe British chip designer also reported first-quarter results that topped expectations. Revenue hit **$1.29 billion**, beating the **$1.26 billion** analyst forecast, while adjusted earnings per share reached **45 cents** against a **40-cent** estimate. The dual beat underscores how AI infrastructure spending is reshaping the semiconductor licensing landscape.\n\nArm's royalty revenue, collected on each chip shipped using its technology, surged **22%** to **$715 million** in the quarter. Licensing revenue grew **23%** to **$574 million**, reflecting a wave of new design wins as hyperscalers like **Alphabet** and **Amazon** build custom AI accelerators. These companies are moving beyond off-the-shelf GPUs to architect chips tailored for their specific AI training and inference needs, often licensing Arm's instruction set.\n\nPower efficiency is the linchpin. Arm's architecture, originally honed for mobile devices, now gives data center chips a critical edge in managing the ballooning energy costs and thermal output of massive AI models. A [recent study](https://arxiv.org/abs/2402.19427) found that Arm-based server CPUs can deliver up to **40%** better performance-per-watt than x86 alternatives for cloud-native workloads, a metric that directly impacts total cost of ownership for AI fleets.\n\nThe company's new **AGI CPU**, a data center chip unveiled in **March**, is already exceeding internal projections. Demand now surpasses **$2 billion** across fiscal years **2027** and **2028**, Arm said, and the product has been delivered to multiple customers. Cloud giant **Oracle** has agreed to purchase the chip, CEO **Rene Haas** confirmed in an interview, though he declined to disclose the contract value.\n\n**\"We have new customers in North America and China,\" Haas said, adding that the company can now secure supply for more than $1 billion worth of chips.**\n\nThe supply chain reassurance marks a shift from three months ago, when capacity constraints clouded the outlook. **\"I feel better about (supply) than I did 90 days ago,\"** Haas noted, signaling that fabrication partners are ramping to meet demand.\n\n**Jefferies** analysts project AGI CPU sales could reach **$18 billion** by fiscal **2031**, eclipsing Arm's own **$15 billion** forecast. Haas said the company is not changing any guidance Wednesday, but the bullish external estimate highlights the market's conviction that Arm can ride the AI infrastructure wave beyond its traditional royalty model.\n\nArm's second-quarter adjusted profit is expected to be **47 cents** per share, above the **43-cent** consensus. The company's deepening ties with cloud titans and its expanding footprint in AI servers position it at the center of a tectonic shift: the move from general-purpose compute to domain-specific architectures optimized for AI. As [Arm's technical blog](https://www.arm.com/company/news/2024/03/arm-unveils-new-ai-data-center-chip) details, the AGI CPU integrates novel memory hierarchies and interconnects designed to slash latency for large language model inference, a differentiator that could lock in hyperscaler roadmaps for years.\n\nThe results arrive as the broader chip industry grapples with geopolitical tensions and export controls, particularly around advanced AI silicon destined for China. Haas's mention of new Chinese customers suggests Arm is navigating those restrictions, likely by licensing architectures that fall below performance thresholds. The company's global licensing model, which collects fees upfront and royalties later, provides a diversified revenue stream less susceptible to single-market shocks.", "url": "https://wpnews.pro/news/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand", "canonical_source": "https://insideai.news/news/ai-hardware-infrastructure/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand/6497/", "published_at": "2026-07-29 21:17:15+00:00", "updated_at": "2026-07-29 21:41:39.790668+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure", "ai-startups"], "entities": ["Arm Holdings", "Alphabet", "Amazon", "Oracle", "Rene Haas", "Jefferies", "AGI CPU"], "alternates": {"html": "https://wpnews.pro/news/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand", "markdown": "https://wpnews.pro/news/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand.md", "text": "https://wpnews.pro/news/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand.txt", "jsonld": "https://wpnews.pro/news/arm-forecasts-q2-revenue-above-estimates-on-ai-chip-demand.jsonld"}}