Arm Holdings Plc: Takeaways from Our 2026 U.S. All Stars Conference

Earlier today, we hosted investor meetings with Ian Thornton, VP of Investor Relations at Arm, at our U.S. All Stars Conference in London to discuss Arm's longer-term growth opportunities and to review current dynamics in the datacenter market and broader semiconductor industry. Key takeaways: AI and datacenter demand trends remain strong, benefitting the licensing/royalty business and the upcoming merchant AGI CPU launch; the team is even more confident (versus the last earnings call) on securing additional supply for its 3nm AGI CPU to drive >$1B in AGI CPU revenues FY27-FY28, although some potential for lower GMs exists, with Meta as the primary customer; and embedded (industrial/auto/IoT) continues to see strong penetration of Arm's Ethos NPU for AI/ML acceleration, providing a further potential tailwind to embedded royalty growth. Rating: Overweight.