Arm Holdings plc (ARM.US): A Quarter with Few Surprises?

A Quarter with Few Surprises? Arm Holdings prints 2Q27 results this Wednesday 4th November. Our conversations with investors suggest mix effects from royalties are well understood with the focus on the CPU opportunity, as in previous quarters this year. We wouldn't view the Q2 print as a catalyst for the stock and remain Equal-weight, PT $212. We expect an in-line September quarter with royalty mix effects and opex hikes well understood. Consistent with last quarter's guide, we model Arm's licensing sales at $670mn and royalties at $703mn, implying 30% and 13% yy growth. The main focus will be the CPU guide, with the market looking for a formal increase in the FY28e CPU sales guide from $1bn to $2bn. We see non-GAAP opex coming in at $782mn, increasing 7% sequentially, though this could come in higher than street estimates. Near-term catalysts remain thin which keep us on the sidelines.