Arm Holdings (NASDAQ:ARM) extended its winning streak to a fifth consecutive day on Monday, jumping as much as 16.8 percent in intraday trading to hit $322, as investors resumed buying positions after management signaled a very strong business performance, saying that demand has “never been stronger.”
In an interview with CNBC’s Jim Cramer last Wednesday, CEO Rene Haas said that demand “is off the charts” for CPUs, GPUs, and memory from data centers, automotive robotics, and edge computing industries.
However, he said that the industry may struggle to keep up with the demand, pointing to bottlenecks in wafers, substrates, testing equipment, and memory, among others.
For illustration purposes only. Photo from Arm Holdings
$2B Emerging Chip Revenue Achievable
In this light, Haas said that he has become more confident that Arm Holdings will hit its revenue target of $2 billion for its emerging chip business alone.
“So what we said in the earnings call I think was May timeframe that we had visibility to $2 billion, and what we said in the last earnings call was that our confidence to achieve that $2 billion number had increased from May to July,” he said.
“Here I am in September, and what I can tell you is, Jim, I’m more confident today than I was on that July earnings,” he added.
“We’re feeling good about it. We’re feeling really good about it.”
The comments were significant because investors turned increasingly focused on its ability to turn the ongoing strong demand into revenues, especially as chipmakers continue to compete for limited manufacturing capacity.
Arm Holdings first disclosed its $2 billion goal during its May earnings call, double the $1 billion it had outlined when it first announced its first custom CPU in March.
In July, management said that its confidence in securing the necessary supply had further improved.
Q2 FY2027
Arm Holdings is set to release the results of its earnings performance for the second quarter of fiscal year 2027 ending September on November 4, 2026.
For the period, it is targeting total revenues at a midpoint of $1.38 billion, plus or minus $50 million.
Non-GAAP diluted earnings per share are also pegged at a midpoint of $0.47, plus or minus $0.04.
Hedge Funds Highly Bullish
Institutional investors appeared highly optimistic about Arm Holdings’ long-term growth prospects, as evidenced by the whopping jump in their committed capital in the previous quarter of the year.
Data from Insider Monkey showed that during the period, 52 hedge funds held positions in the stock, up from 46 in the first quarter of the year.
More notably, their combined holdings soared by 142.8 percent to $3.4 billion from $1.4 billion quarter-on-quarter.
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