Arm plc(US:ARM) Zhi Tong Cai Jing·2025-11-07 02:53Core Insights - ARM's efficiency in computing platforms is approximately 50% higher than competing solutions, leading to significant adoption by major companies like NVIDIA, Amazon, Google, Microsoft, and Tesla [1][2] - The unprecedented demand for computing power is primarily based on ARM technology, contributing to over 100% year-on-year growth in the Neoverse business segment [1][2] - The Chinese market has shown strong performance with historical high demand, driven mainly by license revenue, including a large licensing deal [1][7] Financial Performance - In Q2, SoftBank-related revenue increased from $126 million to $178 million, a rise of $52 million, which serves as a future reference benchmark [5] - The revenue from SoftBank includes IP licensing and design services, with design services having a lower profit margin [5] Strategic Initiatives - ARM's acquisition of DreamBig Semiconductor is aimed at enhancing its Ethernet and DMA controller capabilities, which will expand its product offerings [3] - Collaboration with SoftBank on the Stargate project is expected to provide significant business opportunities in data center construction [3] Market Trends - The infrastructure business is growing at twice the average rate of other categories, with expectations of a 15% to 20% revenue share in ARM's royalty income [6] - The shift in data center computing from training to inference is anticipated, with strong demand for ARM's technologies in edge computing [7] Future Outlook - ARM maintains confidence in its future prospects based on current capital expenditures and the ongoing strong AI cycle [1][7] - The company plans to provide clearer guidance for Q4 based on its licensing reserves and the timing of large licensing deals [1][7]