Arm CEO looks to set the record straight after the stock's post-earnings tumble

An important development from the financial markets: Arm Holdings CEO Rene Haas on Thursday sought to reassure investors about one of the biggest sticking points after its earnings report: Will Arm be able to produce enough of its AI chips to meet demand? In an interview with Jim Cramer on CNBC, Haas said he was "confident" that Arm would secure a sufficient supply of its new central processing units (CPUs) to meet its stated $2 billion in customer demand across fiscal 2027 and fiscal 2028. Arm's fiscal 2027 started last month.

"This is not perishable demand, to be clear," Haas said. "This is demand that is firm, sustaining, and very, very robust. Agentic AI puts a huge amount of pressure on the CPU to do all the work around orchestration, scheduling, and the management of these agents.

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That's only work the CPU can do. So, while we are in the process of securing supply for that additional demand, the demand is not going away. I'm confident we'll get that supply, and I'm also very confident that demand is going to continue.

" The reason why this matters: That $2 billion figure is double what Arm laid out in March when it announced the chip, branded as the AGI CPU. Investors were excited to see that upward revision in Arm's shareholder letter released after Wednesday night's close, and it helped explain why the stock got an after-hours pop. Doubts arose, though, when CFO Jason Child said on the earnings call about an hour later that Arm was maintaining its official outlook of $1 billion in AGI CPU revenue over the next two fiscal years "while we pursue supply chain capacity.

" He added, "We still expect the first revenues from production chip sales to land in the fourth quarter of this fiscal year. " Shares started to lose steam on the supply chain comment. Now layer in that the stock was red hot coming into the print, and it's unsurprising to see shares down 10% on Thursday.

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Arm shares ended Wednesday up about 75% since debuting the AGI CPU on March 24. Under these conditions, talking about line-of-sight into more revenue but not actually upping the forecast is going to invite profit-taking. On Wednesday, Jim warned that the stock was vulnerable to a pullback at any hint of imperfection.

ARM 1Y mountain Arm's stock performance over the past 12 months. It turned out the imperfection was around the supply chain, an incredibly complex network of designers, suppliers, and manufacturers all scrambling to meet soaring demand for computing power, as companies spend hundreds of billions of dollars to build new data centers stocked with server racks. Among the biggest bottlenecks right now is securing enough capacity at Taiwan Semiconductor Manufacturing Co.

, the world's most advanced third-party chipmaker, to have your product made and packaged. Even though TSMC is ramping up its capacity, volume production cannot happen overnight due to the sheer complexity of the task. Nvidia , Advanced Micro Devices , and Broadcom (co-designer of Google's popular in-house AI chip) are all major customers of TSMC.

Financial markets are tracking the development closely as investors assess the likely impact.