Arm Holdings stock soars despite smartphone slowdown
British chip-maker Arm Holdings was boosted by a demand to licence its technology from manufacturers during the second quarter, which compensated for a slowdown in its royalties from the sale of smartphones.
Arm’s shares led the FTSE 100 risers yesterday as investors poured into the tech stock sending its shares soaring 5.7 per cent to 881p, after it reported a nine per cent rise in profit to £94.2m during the quarter to 30 June
With smartphone growth slowing, nearly all Arm’s revenue growth was the result of chipmakers signing 41 new licences for its processors. That prompted a 42 per cent jump in revenue, to £187.1m, across applications from wearable technology to networking equipment.
“Our continued strong licensing performance reflects the intent of existing and new customers to base more of their future products on Arm technology. The 41 processor licences signed in the second quarter were driven by demand for Arm technology in smart mobile devices, consumer electronics and embedded computing chips,” said Arm chief Simon Segars.
“This bodes well for growth in Arm’s medium- and long-term royalty revenues.”