![\"\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2024\/05\/411323532.jpg\")
<\/p>\nArm Holdings Plc shares tumbled after the chip designer gave a lukewarm revenue forecast for the fiscal year, raising concerns that the tech industry\u2019s artificial intelligence spending spree is slowing.<\/p>\n
For fiscal 2025, which ends next March, revenue will be $3.8 billion (R70.58 billion) to $4.1 billion, the company said Wednesday.<\/p>\n
Profit will be $1.45 (R29.63) to $1.65 a share. Analysts were predicting a total of $4.01 billion \u2014 representing a gain of 26% \u2014 and a profit of $1.53 a share.<\/p>\n
The shares dropped as much as 10% to $95.25 in late trading after the report was released.<\/p>\n
Three months ago, an upbeat forecast sent its shares soaring and helped turn the company into an AI darling on Wall Street.<\/p>\n
The stock was up 41% this year through Wednesday\u2019s close.<\/p>\n
<\/p>\n
Arm\u2019s chip designs and licensed standards are a critical technology for most smartphones.<\/p>\n
Under chief executive officer Rene Haas, the UK-based company is trying to parlay that position into a bigger presence in data centre hardware \u2014 where AI demands are spurring major upgrades.<\/p>\n
As part of that push, Arm is offering more complete technology blueprints to companies such as Amazon.com Inc.\u2019s AWS.<\/p>\n
In an interview, Haas said Arm remains \u201cvery confident in the long-term growth.\u201d<\/p>\n
\u201cA lot of the strategies we put in place a couple of years ago are all coming together,\u201d he said.<\/p>\n
The company believes it will post a revenue growth rate of at least 20% in fiscal 2026 and 2027, chief financial officer Jason Child said on a conference call with analysts.<\/p>\n
Sales will be $875 million to $925 million in the June quarter, the chip designer said.<\/p>\n
That compares with an average analyst estimate of $868 million.<\/p>\n
Earnings per share, minus certain items, will be 32 cents to 36 cents. Wall Street was projecting 31 cents.<\/p>\n
In the fiscal fourth quarter, ended in March, revenue was $928 million. Excluding some items, profit was 36 cents a share.<\/p>\n
That compares with average estimates of $880.4 million and earnings of 30 cents a share.<\/p>\n
Arm has an unusual role in the semiconductor industry.<\/p>\n
It licenses the fundamental set of instructions that software uses to communicate with chips.<\/p>\n
The company also provides so-called design blocks that companies such as Qualcomm Inc. use to build their products.<\/p>\n
Arm has been moving toward providing more complete layouts that can be taken directly to the manufacturing stage.<\/p>\n
That shift makes it more of a competitor for customers like Qualcomm, but more valuable to others \u2014 most notably, large data center owners.<\/p>\n
Cambridge, England-based Arm is still 90%-owned by SoftBank Group Corp., which acquired the business in 2016 for $32 billion. An\u00a0initial public offering\u00a0in 2023 raised $4.9 billion, marking the biggest debut on a US exchange that year.<\/p>\n
Arm\u2019s licensing sales increased 60% to $414 million last quarter, and royalty revenue gained 37% to $514 million.<\/p>\n
The licensing revenue is a proxy for \u201cR&D, and for confidence in investment\u201d by tech companies, Haas said<\/p>\n","protected":false},"excerpt":{"rendered":"
The chip designer gave a lukewarm revenue forecast for the fiscal year, raising concerns that the tech industry’s artificial intelligence spending spree is slowing.<\/p>\n","protected":false},"author":341034,"featured_media":536025,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[92837,15],"tags":[94475,4018,94477,94479,78626,94473],"class_list":["post-536013","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ai","category-hardware","tag-arm-holdings-plc","tag-arm-processors","tag-jason-child","tag-processor-architecture","tag-qualcomm-inc","tag-rene-haas"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/536013"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=536013"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/536013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/536025"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=536013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=536013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=536013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}