Arm surges 60% after lifting guidance thanks to AI-led demand boost
Investing.com | Author Yasin Ebrahim
Published Feb 07, 2024 04:34PM ET
Updated Feb 08, 2024 07:39AM ET
Investing.com -- Arm shares surged as much as 60% Thursday after the chip designer hiked its annual guidance as royalty and licensing revenue was bolstered by soaring demand for artificial intelligence.
In only its second earnings report since going public in September, Arm said it expects future growth will be "driven by the need for more energy-efficient compute and AI capability."
The chip designer, which counts Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC) and Apple (NASDAQ:AAPL) among its backers, reported fiscal third-quarter adjusted earnings of $0.29 per share on revenue of $824 million. That was ahead of Wall Street estimates for EPS of $0.25 on revenue of $761.6M.
Looking ahead, the company guided for adjusted EPS of $1.20 to $1.24 on revenue of $3.16B to $3.21B, up from a prior estimate for adjusted EPS of $1 to $1.10 on revenue between $2.96B to $3.08B,.
For its current quarter, the company forecasts adjusted EPS of $0.28 to $0.32 on revenue of $850 to $900M. That was above estimates for EPS of $0.21 on revenue of $780.3M.
"Arm is a key beneficiary of rising demand for edge AI devices, especially premium smartphones," said analysts at Jefferies in a note to clients.
Scott Kanowsky and Senad Karaahmetovic contributed to this report.
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