Shares of Arm Holdings (ARM +13.58%) were soaring today as the semiconductor stock known for its power-efficient CPU architecture rose in tandem with a strong earnings report from Advanced Micro Devices (AMD +18.37%). The company also got a boost from a price target hike, and investors are looking ahead to its earnings report this afternoon.
As of 11:29 a.m. ET, the stock was up 12.8%.
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Why AMD's update was good news for Arm
Arm jumped on Intel's earnings report recently as it showed surging demand for CPUs due to increasing inference demand for agentic AI, and it seemed to do the same thing on AMD's results.
AMD's revenue jumped 38% year-over-year to $10.3 billion, which was ahead of estimates at $9.9 billion, and it beat estimates on the bottom line as well. Second-quarter revenue guidance of $10.9 billion-$11.5 billion was also much better than the consensus at $10.52 billion.
CEO Lisa Su said, "We are seeing strong momentum as inferencing and agentic AI drive increasing demand for high-performance CPUs and accelerators."
AMD's results and commentary seemed to stoke expectations for Arm's report tonight and its future growth in the CPU market.
Additionally, Mizuho raised its price target from $230 to $255, and maintained an outperform rating on the stock.
NASDAQ: ARM
Key Data Points
What's next for Arm
Arm stock is likely to move tomorrow, following its earnings release. Headline expectations are modest, with revenue expected to grow 18.4% to $1.47 billion and adjusted earnings per share seen ticking up from $0.55 to $0.58.
However, those expectations may have risen following AMD's results. Whatever happens in the quarter, Arm looks well-positioned to capitalize on the AI boom, especially as it launches its own CPU.
