AI brought both benefits and losses: ARM boosted server profits, but smartphones worsened the situation—shares fell by 8 %.

Brief summary of the news material

1. Overall context
In a rapidly growing artificial intelligence (AI) market, companies face a dual effect: simultaneous strengthening and weakening of business segments.

2. Example – British holding Arm
Metric | Actual value | Analyst expectations
Revenue for quarter | $1.24 billion (growth +26%) | EPS (earnings per share) 43 cents
Forecast revenue (next period) | $1.47 billion | $1.4–$1.5 billion
Forecast EPS | 58 cents | 56 cents

- Licensing revenue from developments was $505 million, slightly below the expected $520 million.
- Royalty income was $737 million, above the average forecast.
- In the data‑center segment, license revenue doubled compared to last year.

3. Positive and negative factors
Segment | Impact on business
Server architectures | Positive – revenue growth and prospects for the next two years
Smartphones | Negative – revenue decline due to memory shortages

Arm CFO Jason Child explained to investors that higher demand for more expensive smartphone models partially offsets the overall downturn.

4. Role of SoftBank shareholder
- SoftBank owns about 90 % of Arm shares.
- SoftBank CEO René Haas reported a conversation with Masayoshi Son, who assured there were no intentions to sell large blocks of Arm stock.
- This year and last year SoftBank plans to invest roughly $60 billion in OpenAI’s capital, so the company has already sold Nvidia and T‑Mobile shares to raise funds.

5. Arm leadership position
Arm’s head noted that demand for their developments exceeded expectations, especially in data‑center (DC) areas. However, he did not comment on long‑term growth forecasts in this segment and preferred a conservative approach. Nevertheless, according to him, server processors will become the main source of revenue for Arm over the next two years.

6. Stock outcome
Despite positive figures, Arm shares fell 8 % after the report’s release, reflecting investors’ caution toward current smartphone market challenges and overall uncertainty around AI technologies.