(Bloomberg) -- Arm Holdings Plc gave a cautious revenue forecast for the current period, adding to recent concern that spending on artificial intelligence computing is slowing. 

Revenue will be $1.18 billion to $1.28 billion in the fiscal fourth quarter, which runs through March, the chip designer said in a statement Wednesday. Though that was up from a prior forecast — and in line with the average Wall Street estimate — some analysts were predicting as much as $1.33 billion. 

The outlook follows a disappointing forecast from Advanced Micro Devices Inc. earlier this week, sparking fears that the booming market for AI hardware is now on shakier ground. Chinese startup DeepSeek, which unveiled an inexpensively produced AI model last month, has raised the specter that technology providers won’t be generating as much revenue as predicted. 

Arm shares fell about 5% in late trading after the report was released. They had been up 40% this year through the close.

Arm’s designs and standards are fundamental to semiconductors that run most of the world’s smartphones. Under Chief Executive Officer Rene Haas, the Cambridge, UK-based company has sought to extend its reach into data centers and personal computer components — helping it benefit more from AI spending.

Arm majority owner SoftBank Group Corp. also is in advanced talks to acquire Ampere Computing LLC, a startup that would provide a greater position in AI computing chips, Bloomberg News reported earlier Wednesday.

Haas said in an interview that the company has “phenomenal tailwinds,” but that it wants to be careful in setting targets. 

“It’s our sixth quarter as a public company,” he said. “We’re trying to be disciplined.”

Arm’s latest results easily beat estimates. Revenue in the three months running through December rose 19% to $983 million. That compares with a $946.8 million prediction from analysts. Excluding some items, profit was 39 a share, topping the average estimate of 34 cents. 

Arm has emerged as a central player in efforts to promote AI technology. It’s part of a project called Stargate aimed at expanding US-based AI infrastructure, alongside owner SoftBank and OpenAI. It’s also involved in a similar endeavor in Japan, where SoftBank is based. 

At the same time, Arm is waging a bitter legal fight with Qualcomm Inc., which had been its biggest partner. That company also delivered its quarterly results Wednesday afternoon.

Arm gets paid in the form of license fees and royalties for its technology, which governs the ways chips and software communicate. Licensing revenue was $403 million last quarter, while royalty sales were $580 million. Both figures topped estimates.

Though Arm had its initial public offering two years ago, roughly 90% of the company is still owned by SoftBank.

(Updates with CEO remarks in seventh paragraph.)

©2025 Bloomberg L.P.