Arm Holdings, US0420682058

Arm Holdings stock weighs record Q2 against softer royalty outlook

Published on 11/05/2026 at 15:44 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Arm Holdings stock weighs record revenue against softer near-term royalty growth. Management raised confidence in its AI CPU opportunity despite smartphone pressure.

What changed for investors

Arm delivered record fiscal second-quarter revenue, driven by strong licensing growth and expanding data-center royalties.
Management expects continued license momentum but sees smartphone weakness limiting near-term royalty growth.
Confidence in up to USD 2 billion of Arm AGI CPU revenue across fiscal 2027 and 2028 has increased.

Arm Holdings, US0420682058, Illustration mit AI erstellt.

Arm Holdings delivered a record fiscal second quarter on Wednesday, November 4, as licensing demand and data-center adoption offset slower growth in some royalty markets. The company discussed the results and outlook during its Q2 2027 earnings call.

Record revenue, mixed royalty signals

Revenue reached USD 1.443 billion, up 27 percent from a year earlier and above the stated analyst estimate of USD 1.378 billion. License and other revenue rose 50 percent to USD 773 million, while royalty revenue increased 8 percent to USD 670 million.

Data-center royalties doubled year over year, with cloud AI the largest growth driver. Physical-AI royalties advanced 50 percent, supported by automotive and robotics demand, while edge-AI royalties were roughly flat. Higher memory prices continued to weigh on smartphone unit sales, particularly in lower and mid-tier segments.

AI opportunity moves into focus

Management said it now has greater confidence in generating up to USD 2 billion from the Arm AGI CPU across fiscal 2027 and 2028. Customer purchase orders and supply agreements have strengthened that outlook, while first commercial deliveries remain targeted for fiscal fourth-quarter 2027.

For fiscal third quarter, Arm guided to revenue of USD 1.54 billion, plus or minus USD 50 million. Licensing revenue is expected to remain strong, but royalty growth is forecast to be in the low single digits year over year because of smartphone pressure and a difficult comparison base.

Share price and investor context

Arm Holdings stock traded at 156.00 euros on Lang & Schwarz at 15:35 CET on Thursday, November 5, 2026; that is 22.87 percent below the 202.25 euro quote in the October 27 report. Investors can monitor the real-time quote of Arm Holdings stock.