Arm Holdings shares soared 6% in after-hours trading Tuesday after Chief Executive Officer Rene Haas announced annual sales forecasts for 2031 that would be more than six times higher than 2025.
Haas unveiled Arm’s first in-house chip at an event in San Francisco on Tuesday, with Meta being its first customer. CNBC visited Arm’s research lab in Austin, Texas, earlier this month to get an exclusive first look at the chip.
Arm shares closed about 1.5% lower on Tuesday following the chip announcement.
Haas said Arm expects the new chips to generate annual sales of about $15 billion by 2031, total annual sales of $25 billion and earnings per share of $9.
As computing needs change due to agent AI, there is a renewed demand for central processing units. Haas predicted a fourfold increase in demand for agent AI on CPUs.
“We may be underestimating that number,” Haas said Tuesday. “I think the demand is higher than we thought.”
This is a big step forward for the chip design company, which had annual sales of just over $4 billion in 2025.
Arm AGI CPUs are data chips optimized for AI inference. The move is a long-awaited move that marks a major change for the so-called semiconductor company as it enters new competition with customers.
Jason Child, Arm’s chief financial officer, said Arm is selling the new chips at gross margins of about 50%.
“This expands the market to include customers who weren’t interested in the IP model, gives current customers more choice, and creates a much larger profit opportunity for Arm,” Child said at an event on Tuesday.
For 35 years, the UK-based company has licensed its instruction set to fabless chipmakers and collected royalties on every processor built with its designs.
Arm is best known as the primary architecture for almost all smartphones, but it started competing with x86 data center chips in 2016. intel and AMD We launched the Neoverse platform in 2018.
Amazon The company captured the Neoverse mainstream with its first custom processor, Graviton. now google, microsoft Many other companies are also basing their AI chips on Arm.
“We have no intention of forcing existing customers to migrate to this new model,” Child said.
Arm CEO Rene Haas introduced the new Arm AGI CPU at an event in San Francisco, California on March 24, 2026.
Katie Tarasoff | CNBC
Arm did not reveal the cost of the new chip, but head of cloud AI Mohamed Awad said in an interview with CNBC that it would be “competitively priced.”
Chip analyst Patrick Moorhead expects the cost to be in the thousands of dollars.
Awad said he hopes the new chip will serve as an option for companies that can’t afford to manufacture their own processors.
Ben Bajarin of Creative Strategies told CNBC: “Arm has typically modeled itself purely on license and royalty businesses, but now they want to give investors new market opportunities and businesses to model well. So it’s not surprising that it’s taking a while for people to understand the valuations and new revenue targets.”
WATCH: Inside Arm’s $71 million chip lab building the first-ever CPU
