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Arm Reports Record Sales as AI Orders Top $2 Billion but Supply Falls Short

Investor attention shifts to capacity limits on Arm's new AI chips.

Overview

  • Arm reported March‑quarter revenue of $1.49 billion, up 20% year over year and above forecasts.
  • The company said demand for its first production chip, the Arm AGI CPU, exceeds $2 billion over the next two fiscal years.
  • Executives said Arm has not secured enough manufacturing capacity, with tight supply for wafers, memory, substrates, and packaging slowing near‑term deliveries.
  • Data center revenue more than doubled as major cloud providers expanded Arm‑based systems for AI and server workloads.
  • Bank of America raised its price target to $245 but kept a Neutral rating, citing supply constraints, a rich valuation, and competition even as it models a large long‑term market.