Arm Holdings stock faces new test as AI data centers spread

Arm Holdings stock is increasingly exposed to where the world's AI infrastructure is built, not just to the pace of construction in the United States. In a report published on Thursday, November 12, Yahoo Finance said CEO Rene Haas warned that the rest of the world was ready to build data centers if the US hesitated.

Haas made the comment during a CNBC interview on November 5. The report linked the warning to growing resistance to data-center projects in the US and to Google's plan to invest USD 15 billion in Malaysia in 2027 and 2028. For Arm, the location of a campus matters less than the number of chips deployed there because the company earns licensing and royalty revenue from Arm-based designs.

Arm Holdings stock traded at 181.50 euros on Lang & Schwarz at 12:54 CET on Friday, November 13.

Data centers offset phone-market pressure

The argument for Arm's data-center exposure rests on the company's latest quarterly performance. In results released on November 4 for the quarter ended September 30, Arm reported record fiscal second-quarter revenue and described its fifth consecutive quarter of more than 20 percent year-over-year growth.

According to Arm's newsroom, licensing and other revenue rose 50 percent year over year to USD 773 million. Royalty revenue reached USD 670 million, with data-center royalties doubling. Overall royalty growth was slower because memory pricing weighed on the smartphone market, a contrast that leaves Arm dependent on the continued migration of computing demand toward servers.

The company also said partners shipped more than 10 billion Arm-based chips during the quarter. Arm expects its share of server deployments at the largest hyperscalers to exceed 60 percent by the end of calendar 2026, compared with more than 50 percent in calendar 2025 and 15 percent in calendar 2024.

AGI CPU adds execution risk

Arm is expanding beyond intellectual property with its own Arm AGI CPU. The company said confidence had increased in reaching up to USD 2 billion of revenue from the product across fiscal years 2027 and 2028. Purchase orders extend through calendar 2027, while first commercial deliveries remain on track for fiscal fourth quarter 2027.

That opportunity also introduces a supply test. Haas told Yahoo Finance that demand is strong, but the wider AI-chip industry continues to compete for manufacturing capacity. Oracle Cloud Infrastructure plans to offer Arm AGI CPU instances in 2027, giving investors a visible customer milestone beyond the licensing pipeline.

For shareholders, the central question is whether strong licensing bookings and data-center adoption translate into sustained royalty growth. Arm's smartphone exposure remains a near-term counterweight, while its own silicon strategy could widen revenue potential if production and customer deployments proceed as planned.

In the broader US market, investors can follow developments through Current market reports on the S&P 500.

Further coverage is available in More news and analyses on Arm Holdings stock.