By Asa Fitch

Arm reported record quarterly sales, buoyed by a rush of artificial-intelligence chip buying, but its outlook disappointed investors, sending shares lower.

The chip designer's top executives said AI was driving strong demand for Arm-based semiconductors. In a shareholder letter, they cited new developments in hardware and language models that make AI more viable on personal computers, smartphones and cars.

-- Sales of $983 million last quarter beat the $939 million forecast of analysts polled by FactSet.

-- The revenue forecast of $1.175 billion to $1.275 billion for this quarter broadly met a consensus projection of $1.221 billion.

After rising 6.8% in the previous session, Arm's shares fell roughly 4% Thursday morning.

Arm's basic circuit architecture is inside nearly all of the world's smartphones, and its technology has spread rapidly into other arenas in recent years. Arm-based chips for PCs, servers and a wide variety of other electronic devices have proliferated.

Nvidia, the leader in AI chips, is using an Arm-based central processing unit in some of its most powerful hardware.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

February 06, 2025 10:12 ET (15:12 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.