UK chip designer ARM shares fell by 10% following disappointing revenue forecasts.
- Arm listed on the NASDAQ in September and has been very successful.
- “The AI tailwind delivered unprecedented growth for our business. The growth and outlook for the company could not be brighter” CEO Haas.
- Before the announcement, Arm’s market value was $109bn
- They reported a 47% increase in 4th quarter revenue to $928m and yearly revenue of $3.23bn
- Despite this, forecast revenues for may 2025 were between $3.8bn and $4.1bn, analyst expectations were at $4.1bn
- Arm forecasted next quarter’s revenue to be 900mn, again disappointing investors.
- A large portion of their revenues come from royalty revenues selling their V9 chip designs for use in devices by companies such as Nvidia, Apple and Amazon.
- Analyst growth expectations come from the assumption that Arm will cut administrative expenses and slowdown R&D