Arm Holdings Shares Reach 3-Month High After Unveiling First Data Centre CPU

Arm Holdings Sees Strong Buying Interest Amid Strategic Shift

Arm Holdings, a chip design firm owned by SoftBank, witnessed a 19% surge in US-listed shares on Wall Street, reaching a 3-month high of $157.80 per share on the Nasdaq. This increase in value comes as the company announced its plan to sell its own chips for the first time, marking a significant strategic shift.

The company unveiled its first-ever data centre CPU, which has entered the customer sampling stage and is slated for production later this year. This new product, dubbed the Arm AGI CPU, features up to 136 cores and consumes approximately 300 watts of electricity. The chip is being co-developed with Taiwan Semiconductor Manufacturing Co., a move that puts Arm in direct competition with key customers such as Nvidia, Amazon, Alphabet, and Microsoft.

As part of this transition, Arm has outlined ambitious sales targets for the coming years, expecting revenue from its new chip business to surpass that of its existing operations, which primarily focus on intellectual property licensing. The company projects total revenue to reach approximately $25 billion within five years, nearly five times its current levels. Its IP licensing business is also projected to grow, reaching about $10 billion over the same period.

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Arm's stock performance plays a crucial role in supporting SoftBank's ability to fund investments in OpenAI and data centres. SoftBank Group Corp., which holds a majority stake in Arm, saw its shares rise 7.9% in Tokyo. Arm's stock has outperformed despite heightened volatility in US markets throughout March, gaining 22.4% so far this month and 42% year-to-date. The stock is trading about 214% higher than its IPO price of $50.