Arm shares surged 10% on Wednesday after the company projected $2bn in sales of its newly launched AI processor for 2027‑28, marking the first tangible payoff from its pivot to selling complete chips. The SoftBank‑backed designer posted $1.5bn revenue in the March quarter, roughly matching Wall Street estimates, and guided $1.26bn for the current quarter, slightly ahead of the $1.2bn consensus.

Demand for Arm’s inaugural data‑centre CPU exceeded internal forecasts, driving licensing income to $819m, surpassing the $775m analysts expected. Royalties fell short at $671m, but the shortfall was offset by stronger AI‑chip design uptake. With the global smartphone market shrinking due to memory shortages, CPU demand is set to quadruple, pitting Arm’s AGI CPU against rivals such as Nvidia, Intel and AMD.

Arm’s market value has more than doubled since January, buoyed by the AI‑chip launch and a broader surge in CPU orders that followed AMD’s recent earnings beat. CEO Rene Haas, who also heads SoftBank’s international arm, reiterated a five‑year revenue target fivefold higher than current levels. The company now stands ready to claim a larger slice of the data‑centre infrastructure market.