Arm stock soars 25% on strong earnings and bullish guidance - SiliconANGLE

Arm's stock gains more than 25% on strong earnings beat and bullish guidance, outperforming Wall Street expectations.

Arm Holdings Plc's stock saw a surge of over 40% in after-hours trading following the release of its first earnings report since going public again. The company reported strong financial results, with net income for the third quarter at $87 million and earnings before certain costs coming in at 29 cents per share, beating Wall Street's estimates. Revenue for the quarter also rose by 14% from a year earlier, reaching $824 million, well ahead of the consensus estimate of $761 million.

Arm is known for its chip blueprints that are used in almost every smartphone in the world, and it has seen growth in its royalty-based revenue, which jumped 11% from a year earlier to $470 million. The company also has a nascent licensing business, which brought in $354 million in the quarter, up 18% from a year earlier. This growth is expected to continue, with the company offering a robust outlook for the current quarter, predicting earnings of between 28 and 32 cents per share and revenue of between $850 million to $900 million.

Arm's CEO, Rene Haas, attributed the growth to the ongoing adoption of the company's compute platform, driven by the AI wave. The company's chips are not only found in smartphones but are also increasingly used in PCs, laptops, data center servers, and automotive applications. Arm is increasing its market share in the cloud server market and has seen more customers adopting its advanced chip designs based on the most powerful Armv9 technology.

The company's strong forecast is seen as a positive sign for the wider chipmaking industry, and Arm's return to the stock market through a successful initial public offering has positioned it for further growth. Despite a failed attempt to sell the chipmaker to rival Nvidia, Arm Holdings Plc is forging ahead with its plans for expansion and innovation.

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