Arm Aims for 50% Data Center CPU Market Share by 2025, Challenging Intel and AMD

Arm Holdings ARM expects its data center central processing unit market share to reach 50% by the end of 2025, up from around 15% in 2024.

Arm’s infrastructure chief, Mohamed Awad, told Reuters that the UK-headquartered Arm’s technology, which is 90% owned by Japan’s SoftBank Group SFTBF SFTBY, offers lower power consumption than Intel Corp. INTC and Advanced Micro Devices AMD processors.

Awad noted that by consuming more of Arm’s intellectual property, data center chips entitled them to a higher royalty rate.

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Arm’s chips have become increasingly popular among cloud computing companies as AI data centers use electricity.

Arm stock plunged close to 20% in the last 12 months.

Arm last month reported third-quarter revenue of $983 million, up 19%, beating analyst estimates of $946.73 million. The adjusted earnings of 39 cents per share beat analyst estimates of 34 cents per share. Arm expects fourth-quarter revenue of $1.175 billion-$1.275 billion versus the $946.73 million analyst consensus. The company anticipates fourth-quarter adjusted earnings of 48 cents-56 cents per share versus 34 cents consensus estimate.

Arm’s foray into the chip sales market reportedly directly competes with its clients, including Qualcomm Inc. QCOM and Nvidia Corp. NVDA, for AI and data center chip deals.

Price Action: ARM stock is down 5.83% at $101.51 at last check Monday.

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