Investors eager to hear what the DeepSeek moment means for the AI chip industry will be tuning in on Wednesday, when Arm Holdings discloses its quarterly results.

Arm makes money by licensing its chip designs to semiconductor companies and smartphone makers. That means its management is in a good position to assess the impact of the Chinese AI model on the industry.

Results for Arm's fiscal third quarter are due after the close.

The consensus among analysts is for Arm to report December quarter revenue of $949 million with adjusted earnings per share of 34 cents. For the current quarter, analysts' consensus estimates are for revenue of $1.22 billion and earnings per share of 52 cents, according to FactSet.

On Friday, KeyBanc analyst John Vinh reaffirmed his Overweight rating and $195 price target on Arm. The analyst believes the results won't be a disappointment.

"We expect ARM to post in line results and in line guidance, driven by continued strength in AI and traditional server," he wrote.

Arm's latest advanced chip technology, called Armv9, generates significantly higher royalty rates than its previous Armv8. It is also making progress in high-end cloud server processors. Customers such as Microsoft and Nvidia are making chips with more than 100 "cores" using Arm's designs.

Arm shares are up 128% over the past 12 months, compared with the 9% gain for the iShares Semiconductor ETF.