During Q&A, management discussed AI workloads, smartphone memory constraints, SoftBank relationships, and data-center AI deployment, reaffirming expectations for long-term royalty growth and higher-core CPUs.

Investors remain cautious despite solid fundamentals, with focus on valuation, forward guidance, and risks tied to smartphone cycles ahead of the Q4 conference call.

The article discloses no author positions and notes Barchart’s transparency policy.

Information presented is informational, with no positions held by the author at publication.

Arm reports notable market-share gains across segments (mobile >99%, cloud compute 9%–20%, automotive 36%–44% from FYE22 to FYE25) while facing memory-supply constraints, smartphone unit volatility, competition in AI platforms, and macro/geopolitical risks.

Qualcomm’s after-hours slide followed its quarterly report, underscoring cautious sentiment amid memory-supply constraints impacting device shipments.

Risks cited include execution challenges in moving into complex compute subsystems and custom silicon, potential cost overruns or delays, and valuation concerns tied to reliance on flagship devices and large customers.

Conference call emphasized confidence in AI-driven demand, the shift to agent-based AI workloads increasing CPU relevance in data centers, and ongoing commitment to R&D and next-generation architectures.

Arm reported fiscal third-quarter revenue of $1.24 billion, up 26% year over year, with license and other revenue rising 25% to $505 million, though the segment missed the estimated $519.9 million.

Arm is expanding its processor reach into phones and AI systems, highlighted by partnerships and product momentum such as devices leveraging Tensor G5, and collaborations to boost AI efficiency in data centers and on devices.

Neoverse CPUs have surpassed 1 billion cores deployed, signaling strong data-center growth and the potential for data-center royalties to outpace mobile royalties over time.

Analysts attributed the stock drop to a licensing miss and weaker Qualcomm outlook, with broader industry headwinds from a potential memory shortage affecting smartphones.