Arm Raises Q3 Revenue Forecast on Surge in AI Chip Demand
- ByStartupStory | November 6, 2025
Arm Holdings plc, a leading designer of semiconductor technology, has raised its revenue forecast for the third quarter of fiscal 2025, driven by rising demand for AI-capable chips in data centers and across industries. The company now expects Q3 revenue to reach approximately $1.23 billion, surpassing analyst estimates of $1.1 billion.
Arm’s adjusted earnings per share are projected to be 41 cents, well above the expected 35 cents per share. The positive outlook follows a strong Q2 performance where Arm reported $1.14 billion in total revenue, reflecting a 34% year-over-year increase. Licensing and royalty revenues both exceeded forecasts, supported by growing adoption of Arm’s architectures in smartphones, data centers, and automotive sectors.
CEO Rene Haas highlighted the booming AI computing market as a key growth driver, noting that Arm’s Neoverse data center product line has doubled its revenue, benefiting from increased AI workloads. Additionally, Arm’s Compute Subsystems (CSS) designs, which enable faster chip production, have seen growing adoption, contributing to the company’s improved royalty revenues.
Arm is also signaling a strategic shift toward designing more complete chip products and recently announced plans to acquire DreamBig Semiconductor, enhancing its AI chip capabilities.
Following the announcement, Arm’s shares rose over 3%, reflecting investor confidence in the company’s positioning in the AI revolution.
In summary, Arm Holdings’ raised Q3 revenue forecast and strong financial results underscore its leadership in AI-focused chip technology, driven by expanding demand in data centers and emerging sectors. This momentum positions the company well for sustained growth in the semiconductor market.
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