ARM Holdings (ARMH) shares rose more than 6% in the stock market today after the British chip and software design company issued second quarter revenue that modestly beat analyst views. Cambridge, U.K.-based ARM said Q2 revenue rose 17.1% to $309.6 million, modestly beating analyst views of $306.15 million. Licensing revenue rose strongly, but royalty revenue was sluggish. Fully diluted earnings per share in Q2 based on International Financial
If Apple switches to ARM-based processors from Intel chips for its personal computers, ARM stands to gain a little but Intel would lose a lot, says FBR Capital Markets analyst Christopher Rolland. Media reports by CNet and others claim that Apple (AAPL) is developing an ARM (ARMH) processor to replace Intel (INTC) x86 chips for some or all of the company’s MacBook and iMac product lines. Rolland estimates that ARM would get a royalty benefit of just $7 million a year in his 2017 base-case scenario if Apple makes the switch. Meanwhile, the switch would cost Intel about $740 million in 2017 revenue, or slightly more than 2% of Intel’s total PC processor revenue. This scenario assumes that ARM captures one-third of Apple’s PC units.
ARM Holdings’ (ARMH) stock rose Wednesday after the company offered an upbeat outlook on royalty growth rates through 2018 at its analysts day on Tuesday. Shares for the U.K.-based designer of low-power smartphone chips were up 3% in early afternoon trading in the stock market, near 44. ARM’s stock has sagged nearly 20% in 2014 amid worries over slowing growth of high-end smartphones and Intel’s (INTC) push into the mobile market. ARM’s