Wall Street newbie Arm Holdings PLC (NASDAQ:ARM) is 2.8% higher to trade at $111.91 at last glance, after Nikkei Asia reported the semiconductor name hopes to launch its first artificial intelligence (AI) chip next year.With all the hype surrounding AI chips, it's no surprise that bullish options traders were quick to respond to ARM's update. Already today, 53,000 calls have exchanged hands, or double the intraday average volume.  The most active contract by far is the May 120-strike call, followed by the 1 ...

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Company Strategy and Market Focus - Arm plans to launch artificial intelligence chips in 2025, establishing a new AI chip unit and building a prototype by spring 2024, with mass production expected by fall 2025 [1][2] - The company is pushing into the lucrative AI datacenter market, targeting tech giants like Microsoft, Meta, Alphabet, and Amazon, which are developing in-house AI chips to reduce reliance on Nvidia [3] - Arm's shares have more than doubled since its IPO in September 2023, reflecting investor confidence in its potential to capture a significant share of the AI infrastructure market [3] Financial and Development Details - Arm will fund the majority of the initial development costs, expected to be billions of yen, with SoftBank also contributing [2] - The AI chip business could potentially be spun off under SoftBank once operational [2] - SoftBank has initiated negotiations with Taiwan Semiconductor Manufacturing (TSM) and other chipmakers to secure production capacity [2] Market and Share Performance - The AI chip market is projected to grow from $30 billion in 2023 to $200 billion by 2032, according to Precedence Research [3] - Arm's share price has been trading within a rising wedge since mid-April, with potential support at $79 and resistance near $145 [4] - Arm shares closed at $108.84 last week, gaining 5.1% during Friday's session [4]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

The company's outlook points to growing demand for its chip technology, but will it be enough to send the stock higher?Heading into the company's recent earnings report, Arm Holdings (ARM -2.34%) stock had risen sharply, as investors anticipated strong increases in revenue. Arm delivered on those expectations by reporting record revenues in the March-ending fiscal fourth quarter.However, the stock still fell after the earnings release, as the results weren't quite good enough to justify the company's expens ...

Output of an Artificial Intelligence system from Google Vision, performing Facial Recognition on a ... [+] photograph of a man, with facial features identified and facial bounding boxes present, San Ramon, California, November 22, 2019. (Photo by Smith Collection/Gado/Getty Images)Getty ImagesIt appears, A.I. stocks are hitting a little turbulence during earnings season. I don’t mean the earnings are bad. I’m focused on how A.I. stocks react to the earnings. Let’s take a closer look.Forward-Looking Mechanis ...

Key PointsShares of Arm fell in Wednesday's after-hours session as the company's earnings report disappointed. They managed to beat expectations for the headline numbers but fell short regarding guidance.This could be creating a golden entry opportunity for those of us who are still bullish on the long term potential. 5 stocks we like better than ARMAfter popping more than 100% after their last earnings report in February, expectations would have been high for shares of Arm Holdings plc NASDAQ: ARM to conti ...

The logo of semiconductor design firm Arm on a chip.Shares of British chip designer Arm fell 8.22% in premarket trading on Thursday, as disappointing revenue guidance clouded a positive sales quarter driven by demand for artificial intelligence applications.Arm reported fourth-quarter revenue of $928 million Wednesday, marking a 47% year-over-year rise.Performance was driven by Arm's licensing business, which grew 60% to $414 million in the quarter. The firm cited "multiple high-value license agreements bei ...

Financial Data and Key Metrics - Q4 revenue increased by 47% YoY to $928 million, with licensing revenue up 60% YoY and royalty revenue up 37% YoY [7][13] - Non-GAAP operating margin for Q4 was 42% [13] - Remaining Performance Obligations (RPO) grew by 45% YoY to nearly $2.5 billion [13] - Full-year revenue for FY2024 exceeded $3 billion, and the company expects to approach $4 billion in FY2025 [12][16] Business Line Data and Key Metrics - Royalty growth was driven by ARMv9 adoption, particularly in smartphones and infrastructure, with a 37% YoY increase [7][8] - Licensing revenue surged 60% YoY, driven by increased R&D investment to capture AI opportunities [7] - Compute Subsystems (CSS) strategy is oversubscribed, with high demand across all end markets [10] - First autonomous solutions based on ARMv9 were introduced, targeting the automotive sector with enhanced features like functional safety [9] Market Data and Key Metrics - ARMv9 adoption is accelerating, with 20% of the base converted within a year, driven by premium smartphones and infrastructure growth [25][26] - Automotive sector is expected to see significant growth with ARMv9 adoption and CSS solutions [9][68] - Hyperscalers like Google, Amazon, and Microsoft are adopting ARM-based designs for data centers, driven by AI workloads and power efficiency [9][21][32] Company Strategy and Industry Competition - ARM's strategy focuses on diversification into multiple markets, including infrastructure, automotive, client PCs, and smartphones [12][79] - The company is leveraging its compute efficiency and AI capabilities to gain market share in data centers, competing with traditional x86 architectures [21][32] - ARM's CSS strategy is gaining traction, with Microsoft's Cobalt chip ramping and oversubscribed demand [10][65] Management Commentary on Operating Environment and Future Outlook - Management is confident in the growth outlook, expecting over 20% revenue growth in FY2025, driven by ARMv9 adoption and AI workloads [12][16] - The company anticipates mid-20% royalty growth in FY2025, supported by ARMv9 adoption and market share gains in cloud and automotive [16][17] - Licensing revenue is expected to be lumpy but strong, with broad-based demand across all end markets, particularly driven by AI [16][37] Other Important Information - ARM's installed base of CPUs is used by over 70% of the world's population, positioning the company as a key player in AI workloads from edge devices to data centers [11] - The company introduced the lowest power transformer for IoT designs, the Ethos-U85, further expanding its IoT portfolio [9] Q&A Session Summary Question: Infrastructure Business and Cloud Market Share [20] - ARM's market share in the data center is expected to grow faster than initially projected, driven by AI investments and power efficiency advantages [21][22] Question: ARMv9 Conversion Rate [25] - ARMv9 adoption is accelerating faster than ARMv8, driven by infrastructure growth and premium smartphone demand, with an expected exit rate of 60-70% in 2-3 years [26][28] Question: ARM's Role in Accelerated Data Centers [31] - ARM's performance-per-dollar metric and flexibility in custom implementations make it well-positioned for growth in accelerated data centers, particularly with AI workloads [32][33] Question: Licensing Revenue Mix in FY2025 [36] - Licensing revenue is expected to be broad-based, with significant contributions from AI-related demand across all end markets [37] Question: Royalty Revenue Growth in China [44] - China's royalty revenue growth was driven by a mix shift in consumer buying patterns and recovery in the handset market, with similar trends expected in Q4 [45][46] Question: Royalty Outlook for Q1 FY2025 [49] - Royalty revenue is expected to decline 7% sequentially due to weakness in IoT and industrial markets, but year-on-year growth remains strong at around 20% [51][52] Question: PC Market Potential [55] - ARM is optimistic about growth in the Windows on ARM segment, expecting significant market share gains over the next 12-36 months as the vendor base diversifies [56][57] Question: Licensing Revenue Growth and ATA Conversion [61] - Licensing revenue growth is expected to remain strong, driven by AI demand, with 80% of customers potentially converting to ATA licenses over time [62][63] Question: Automotive v9 Licensing and CSS [67] - Automotive v9 licensing revenue is delayed and will be recognized upon launch, with multiple customers engaged in CSS solutions for automotive [68][70] Question: Royalty Growth Breakdown [71] - Royalty growth is driven by a mix of volume, price, and ARMv9 adoption, with a 5% quarterly increase in mix contributing to mid-20% growth in FY2025 [72][73] Question: Backlog and Licensing Growth [75] - ARM's backlog is strong, with 80% of the midpoint guidance already in backlog or under contract, providing confidence in continued licensing growth [76][77]

Arm Holdings plc Q4 FYE24 Results Presentation Ian Thornton, Head of Investor Relations investor.relations@arm.com https://investors.arm.com ...