ARM

Revenue grew 20% YoY to $1.49 billion, slightly beating analyst estimates of $1.47 billion.

Q1 27 revenue outlook is between $1.21 billion and $1.31 billion, consensus expectations was at $1.25 billion in revenue.

The CPU business is growing (instead of GPU) due to AI inference requirements. The company reported that it had more than $2 billion of demand across fiscal 2027 and 2028 for its new Arm AGI CPUs, following an announcement last month that it would move into the chip-making business, leading to a lot of short-term interest in the stock (but only 10% float).

The company has announced that it expects to generate $15 billion revenue by FY 31 by selling its own chips.

During the call the company mentioned it hasn't secured all suppliers and warned of phone market weakness and shares were down 7.2%, after an initial sharp rise.

We don't see the valuation justified on fundamentals despite giving very generous growth expectations in our model. We maintain our SELL recommendation.

Conversely, we still see some upside in AMS Osram (Add, CHF1.2bn mkt cap 21% upside)) which posted strong Q1. 


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