Core Insights - A new wave of AI-driven demand is significantly reshaping the semiconductor industry, positioning Arm Holdings as a potential trillion-dollar company in the next decade [1] Financial Performance - Arm Holdings reported a record Q2 for fiscal 2026, with revenue increasing by 34% year-on-year to $1.14 billion, marking the third consecutive billion-dollar quarter [3] - Royalty sales reached an all-time high of $620 million, up 21%, driven by strong performance across smartphones, data centers, automobiles, and IoT [3] - Licensing annualized contract value (ACV) rose by 28%, continuing the momentum from Q1 [3] - Adjusted EPS increased by 30% to $0.39 per share [4] Market Demand and Trends - The demand for data center compute is a key catalyst for growth, with the Neoverse data center platform surpassing 1 billion CPUs deployed [4] - Major tech companies like Nvidia, Amazon, Google, and Microsoft are building custom silicon on Arm's architecture, contributing to royalty expansion [4] - Licensing revenue surged by 56% to $515 million, reflecting strong interest in next-generation AI architectures [4] Strategic Alliances and Innovations - Arm announced a strategic alliance with Meta to enhance AI efficiency across various computing levels, leveraging Arm's energy-efficient designs [5] - The relationship with Samsung was expanded, utilizing Arm's compute subsystem in Exynos chipsets to boost AI performance by up to 40% [5] - The launch of Lumex CSS, Arm's advanced mobile compute platform, enables on-device AI capabilities, with partners like OPPO and Vivo set to release flagship products [5]