Arm CEO Acknowledges AMD's Head Start in AI Chips, But Says 'We're Very, Very Serious' About Competing

Arm Holdings PLC (NASDAQ:ARM) CEO Rene Haas acknowledged that rival Advanced Micro Devices Inc. (NASDAQ:AMD) has a long lead in data center chips, but said the company is serious about competing with its first chip.

Faces a Supply Test Against AMD

On Arm’s fiscal second-quarter call Wednesday, Bank of America analyst Vivek Ayyar asked Haas whether Arm has the scale to secure chip supply against AMD.

“AMD has been at it for a long time,” Haas said, pointing to its range of chips and the capacity it buys from Taiwan Semiconductor Manufacturing Co. “This is our first product.”

Haas said Arm has worked with TSMC, Micron Technology Inc., Samsung Electronics Co., and SK Hynix Inc. for decades, sharing its long-term plans with them, but warned that industry supply will be tight.

“It’s a five to ten year endeavor that’s going to require relationships across all the supply chain. And we’re very, very serious about making sure we get all that done,” he added.

ARM Lifts Sales Target for Its AGI CPU to $2 Billion

Haas said demand for the Arm AGI CPU, the data center chip Arm launched in March, has strengthened since.

The company has purchase orders from multiple customers that run through calendar 2027, and its first commercial deliveries remain on track for the fiscal fourth quarter.

Arm now expects up to $2 billion in AGI CPU revenue across fiscal 2027 and 2028, up from the more than $1 billion it cited last quarter.

Haas called Meta Platforms Inc. the “chief customer” and said Oracle Corp. plans to offer AGI CPU instances in 2027.

Q2 Tops Estimates

Arm reported second-quarter earnings of 52 cents per share, which beat the analyst estimate of 42 cents, per Benzinga Pro data. Revenue rose 27% year over year to $1.44 billion, ahead of the $1.38 billion estimate.

For the third quarter, the company expects revenue of $1.54 billion, plus or minus $50 million, against the $1.53 billion analyst estimate. It forecasts adjusted earnings of 56 cents, plus or minus 4 cents, while analysts expect it at 50 cents.

Price Action: On Wednesday, shares closed 5.28% lower at $191.80, and were down 3.86% at $184.40 in premarket trading on Thursday.

Benzinga Edge rankings indicate Arm’s stock has a Momentum score in the 20th percentile and a Value score in the 2nd percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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