The top dog is Nvidia

Chip designer ARM hopes for competition in AI chips

A surprisingly significant jump in revenue makes ARM optimistic for the current quarter. However, the chip designer's outlook for the 2024/2025 financial year, which was also published on Wednesday, fell slightly short of expectations. "I wanted to make sure we set a target that we are confident we can achieve," Chief Financial Officer Jason Child told Reuters.

The timing for the conclusion of license agreements is difficult to estimate. ARM shares listed in the USA fell by nine percent in after-hours trading.

Leader in smartphone processors
Thanks to a robust computer chip economy, the British company reportedly increased its revenues in the past quarter by 47 percent to 928 million dollars (861.97 million euros). On this basis, it forecast sales of between 875 and 925 million dollars for the current quarter. Analysts had previously expected 857.5 million. For the year as a whole, ARM is targeting consolidated revenue of 3.8 to 4.1 billion dollars. The company receives a revenue share for every computer chip sold that is based on its designs. Almost all smartphones in the world run on ARM processors.

Although the hype surrounding artificial intelligence (AI) has brought ARM strong share price gains in recent months, this has only had a limited impact on the balance sheet so far. This is because the special AI processors from global market leader Nvidia in the USA are based on a different technology. However, many of the other semiconductors in high-performance AI computers are manufactured on the basis of ARM designs.

However, the British company is hoping to take a bigger slice of the pie soon. In order to reduce their dependence on Nvidia, numerous AI providers such as Alphabet subsidiary Google are developing their own special processors and relying on ARM designs.