Chip designer Arm’s shares plunge nearly 9% after lackluster revenue guidance

Shares of British chip designer Arm fell 8.83% in premarket trading on Thursday, as lackluster revenue guidance clouded a positive sales quarter driven by demand for artificial intelligence applications.

Arm reported fourth-quarter revenue of $928 million Wednesday, marking a 47% year-over-year rise.

Performance was driven by Arm’s licensing business, which grew 60% to $414 million in the quarter. The firm cited “multiple high-value license agreements being signed” for AI chips.

Arm’s royalty revenues, meanwhile, grew 37% year-over-year to $514 million, with the company citing increasing penetration of its recently introduced Armv9-based chips.

But it was Arm’s guidance that left investors unimpressed. For the 2025 fiscal year, Arm said it expects revenue to come in between $3.8 billion and $4.1 billion. Analysts were expecting revenue of $3.99 billion for the full year, according to LSEG data.

For the 2025 fiscal first quarter — the current quarter — the company said it expects sales of $875 million to $925 million, compared with estimates of $857.5 million.

Correction: This story has been updated to correct the revenue estimates for the 2025 fiscal first quarter.