Arm Holdings stock advances AI silicon push after record Q2

Arm reported a record second quarter for fiscal 2027 on Wednesday, November 4, after the close of the US market. In its Arm Newsroom release, the company said revenue rose 27 percent year over year to USD 1.44 billion for the quarter ended September 30, 2026. It was the fifth consecutive quarter in which total revenue growth exceeded 20 percent.

The revenue mix pointed to continued demand for Arm's compute platform. Licensing and other revenue increased 50 percent year over year to USD 773 million, while royalty revenue reached USD 670 million, up 8 percent. Data-center royalties doubled year over year, and physical AI royalty revenue grew 50 percent as Arm technology gained ground in automotive and robotics applications.

Licensing leads the quarterly expansion

Arm said partners reported more than 10 billion Arm-based chips shipped during the quarter, an increase of 1.5 billion from a year earlier. The platform now supports more than 30 million developers, while Arm-based server market share at the largest hyperscalers rose from 15 percent in calendar 2024 to more than 50 percent in calendar 2025, according to the company.

Management also highlighted pressure in edge AI. Royalty revenue in that area was roughly flat year over year as higher memory prices weighed on smartphone volumes, particularly in lower and mid-range devices. Growth in cloud AI, data centers and physical AI helped offset that weakness.

Arm AGI CPU raises the stakes

The quarter strengthened Arm's move beyond intellectual property licensing into purpose-built silicon. Arm said customer demand for its AGI CPU continued to strengthen and that purchase orders from multiple customers extend through calendar 2027. First commercial deliveries remain on track for the fourth quarter of fiscal 2027.

Arm said it has increased confidence in generating up to USD 2 billion of Arm AGI CPU revenue across fiscal 2027 and 2028. Oracle Cloud Infrastructure plans to offer Arm AGI CPU instances in 2027, adding a visible route into cloud deployments. The company also said its server share at leading hyperscalers could exceed 60 percent by the end of calendar 2026 based on current ramps at AWS, Google, Microsoft and NVIDIA.

Arm Holdings stock traded at 161.80 euros on Lang & Schwarz at 13:17 CET on Thursday, November 5, 2026. Investors are likely to focus next on the conversion of strong licensing activity into recurring royalties and on the timing and economics of the new silicon business.

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