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Another earnings miss? AMD plunges over 17% post-results!
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Only two out of nine earnings reports saw gains! Can Arm break the curse this time with a 'server shortage'?

Author | Eric The global semiconductor IP leader $Arm Holdings (ARM.US)$ will release its FY26 Q3 earnings report after the market closes on February 4, Eastern Time. Previously, the market had been speculating about a shortage narrative for server CPUs, $Advanced Micro Devices (AMD.US)$ and $Intel (INTC.US)$ and the stock price experienced a significant rise. Attention will be on how Arm's management addresses the company’s progress in the data center space. Consensus estimates for key financial metrics - Revenue consensus estimate$1.23 billion., growing by25%, with prior guidance at $1.23 billion. – Consensus GAAP gross margin expectations97.7%, up 0.5 percentage points year-over-year, still leading most companies globally. - GAAP operating profit$246 million, growing by41%; Non-GAAP operating profit$488 million, growing by10%, with prior guidance at $474 million. - GAAP net profit232 million US dollars, representing a year-on-yeardown 8%; Non-GAAP net profit438 million US dollars, growing by5%, previous guidance was 438 million US dollars. Three key focus areas of the earnings report 1. Market hype over server CPU shortages: Can Arm server royalty revenue continue to double? The Arm Neoverse CPU platform has now deployed more than 1 billion CPUs, including$NVIDIA (NVDA.US)$Grace、 ...
Author | Eric
World's leading semiconductor IP company$Arm Holdings (ARM.US)$ Will announce the FY26Q3 earnings report after market close on February 4, Eastern Time. Previously, the market was speculating on a narrative about server CPU shortages, $Advanced Micro Devices (AMD.US)$ and $Intel (INTC.US)$ which led to a wave of stock price increases; attention will be on how Arm's management addresses Arm’s progress in the data center sector.
Consensus forecast for key financial metrics
- Revenue consensus estimate$1.23 billion., growing by25%, previous guidance was $1.23 billion.
– Consensus GAAP gross margin expectations97.7%, an increase of 0.5 percentage points year-over-year, still outpacing most companies globally.
- GAAP operating profit$246 million, growing by41%; Non-GAAP operating profit$488 million, growing by10%, previous guidance was $474 million.
- GAAP net profit$232 million, representing a year-on-yearDown 8%; Non-GAAP net profitUSD 438 million, growing by5%, previous guidance was USD 438 million.
Author | Eric The global semiconductor IP leader $Arm Holdings (ARM.US)$ will release its FY26 Q3 earnings report after the market closes on February 4, Eastern Time. Previously, the market had been speculating about a shortage narrative for server CPUs, $Advanced Micro Devices (AMD.US)$ and $Intel (INTC.US)$ and the stock price experienced a significant rise. Attention will be on how Arm's management addresses the company’s progress in the data center space. Consensus estimates for key financial metrics - Revenue consensus estimate$1.23 billion., growing by25%, with prior guidance at $1.23 billion. – Consensus GAAP gross margin expectations97.7%, up 0.5 percentage points year-over-year, still leading most companies globally. - GAAP operating profit$246 million, growing by41%; Non-GAAP operating profit$488 million, growing by10%, with prior guidance at $474 million. - GAAP net profit232 million US dollars, representing a year-on-yeardown 8%; Non-GAAP net profit438 million US dollars, growing by5%, previous guidance was 438 million US dollars. Three key focus areas of the earnings report 1. Market hype over server CPU shortages: Can Arm server royalty revenue continue to double? The Arm Neoverse CPU platform has now deployed more than 1 billion CPUs, including$NVIDIA (NVDA.US)$Grace、 ...
Three key areas of focus in the earnings report
1. Market hype around server CPU shortages: Can Arm server royalty revenue continue to double?
The Arm Neoverse CPU platform has now deployed more than 1 billion CPUs, including$NVIDIA (NVDA.US)$Grace,$Amazon (AMZN.US)$AWS Graviton,$Alphabet-C (GOOG.US)$Axion and$Microsoft (MSFT.US)$ Cobalt, hyperscaler expected to approach by 202550%New server CPU chips are all based on the Arm architecture.
Author | Eric The global semiconductor IP leader $Arm Holdings (ARM.US)$ will release its FY26 Q3 earnings report after the market closes on February 4, Eastern Time. Previously, the market had been speculating about a shortage narrative for server CPUs, $Advanced Micro Devices (AMD.US)$ and $Intel (INTC.US)$ and the stock price experienced a significant rise. Attention will be on how Arm's management addresses the company’s progress in the data center space. Consensus estimates for key financial metrics - Revenue consensus estimate$1.23 billion., growing by25%, with prior guidance at $1.23 billion. – Consensus GAAP gross margin expectations97.7%, up 0.5 percentage points year-over-year, still leading most companies globally. - GAAP operating profit$246 million, growing by41%; Non-GAAP operating profit$488 million, growing by10%, with prior guidance at $474 million. - GAAP net profit232 million US dollars, representing a year-on-yeardown 8%; Non-GAAP net profit438 million US dollars, growing by5%, previous guidance was 438 million US dollars. Three key focus areas of the earnings report 1. Market hype over server CPU shortages: Can Arm server royalty revenue continue to double? The Arm Neoverse CPU platform has now deployed more than 1 billion CPUs, including$NVIDIA (NVDA.US)$Grace、 ...
In terms of revenue share,Data centers account for 10% of Royalty income,Management stated that it will increase by FY26,15%-20%In addition to contributing License revenue, data center server CPUs are more importantly driving rapid growth in Royalty revenue charged by shipment volume. Last quarter,Data center Neoverse Royalty revenue more than doubled year over year,And we will see if this strong growth momentum continues this quarter.
2. Expectations of a decline in smartphone shipments raise questions about whether Arm V9/CSS can support逆势 growth in mobile business?
Despite only marginal growth in global smartphone shipments in 20252%(According to Counterpoint data), Arm continues to benefit from Arm V9 (contributing to royalty revenue30%+) and CSS, which are higher royalty rate businesses, allowing its mobile royalty revenue to still growdouble-digit growth.. Previously, the royalty rate for Arm V8 was approximately2.5% to 3%of the chip's ASP, while for Arm V9, it is around5%, and the first-generation CSS reached approximately10%, with the second-generation CSS expected to exceed that10%。
Author | Eric The global semiconductor IP leader $Arm Holdings (ARM.US)$ will release its FY26 Q3 earnings report after the market closes on February 4, Eastern Time. Previously, the market had been speculating about a shortage narrative for server CPUs, $Advanced Micro Devices (AMD.US)$ and $Intel (INTC.US)$ and the stock price experienced a significant rise. Attention will be on how Arm's management addresses the company’s progress in the data center space. Consensus estimates for key financial metrics - Revenue consensus estimate$1.23 billion., growing by25%, with prior guidance at $1.23 billion. – Consensus GAAP gross margin expectations97.7%, up 0.5 percentage points year-over-year, still leading most companies globally. - GAAP operating profit$246 million, growing by41%; Non-GAAP operating profit$488 million, growing by10%, with prior guidance at $474 million. - GAAP net profit232 million US dollars, representing a year-on-yeardown 8%; Non-GAAP net profit438 million US dollars, growing by5%, previous guidance was 438 million US dollars. Three key focus areas of the earnings report 1. Market hype over server CPU shortages: Can Arm server royalty revenue continue to double? The Arm Neoverse CPU platform has now deployed more than 1 billion CPUs, including$NVIDIA (NVDA.US)$Grace、 ...
. However, in 2026, the global smartphone market will face a significant blow from rising memory prices. A sharp decline in shipments could drag down Arm's royalty revenue (mobile accounts for45%), requiring attention to management's response.
3. Will management provide full-year earnings guidance?
The market has long criticized Arm for its biggest issue being too low growth, while its main advantage lies in high certainty. The management's previous refusal to provide full-year guidance eroded market confidence (management mentioned concerns over providing a range that might be too wide). Additionally, SoftBank’s ongoing need to reduce holdings and monetize added further downward pressure.
However, last quarter’s doubling of data center royalty revenue and optimistic guidance showing a significant increase in full-year revenue share have started to convince the market that Arm can also ride the AI wave. Investors still hope to see management provide annual performance guidance to boost investor confidence.
Summary
Overall, Arm has been constrained by weakness in the mobile phone market, and its stock price has already priced in sufficient pessimism. The breakout of data center business remains the key factor determining whether earnings will exceed expectations. Notably, reviewing the past nine quarters' post-earnings closing performances, gains were seen only twice.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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