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Arm Holdings<\/a> stock popped 6% in after-hours trading on Tuesday as CEO Rene Haas announced 2031 annual revenue expectations that were more than six times what it was in 2025.<\/p>\n Haas unveiled Arm’s first in-house chip on Tuesday at an event in San Francisco, with Meta as the initial customer. CNBC got an exclusive first look at the chip<\/a> earlier this month, visiting the lab Arm built for it in Austin, Texas.<\/p>\n Arm stock closed about 1.5% lower on Tuesday following the chip announcement.<\/p>\n Haas said Arm expects the new chip to generate roughly $15 billion in annual revenue by 2031, with total annual revenue of $25 billion and earnings per share of $9. <\/p>\n Central processing units are seeing a resurgence of demand as agentic AI changes compute needs. Haas predicted CPUs will see a fourfold increase in demand around agentic AI.<\/p>\n “We may be under-calling that number,” Haas said Tuesday. “I think the demand is higher than we think it is.”<\/p>\n It’s a huge lift for the chip design firm that generated just over $4 billion in annual revenue in 2025.<\/p>\n The Arm AGI CPU<\/a> is a data chip optimized for AI inference. It’s a long-anticipated move that marks a major change for the so-called Switzerland<\/a> of chip firms as it enters into fresh competition with its customers.<\/p>\n Arm CFO Jason Child said Arm is selling its new chip at about a 50% gross profit. <\/p>\n “It expands our market to include customers that were not interested in an IP model, gives our current customers choice, and for Arm it creates a much larger profit opportunity,” Child said at the event Tuesday.<\/p>\n For 35 years, the UK-based company has licensed its instruction sets to fabless chipmakers and collected royalties on every processor made with its designs. <\/p>\n While best known as the leading architecture in almost every smartphone, Arm started competing with x86 data center chips from Intel<\/a> and AMD<\/a> in 2018 with the launch of its Neoverse platform. <\/p>\n Amazon<\/a> took Neoverse mainstream in its first custom processor, Graviton. Now Google<\/a>, Microsoft<\/a> and many others also base their AI chips on Arm.<\/p>\n “We’re not going to force any of our existing customers to migrate to this new model,” Child said.<\/p>\n Arm CEO Rene Haas introduces the new Arm AGI CPU at an event in San Francisco, California, on March 24, 2026.<\/p>\n Katie Tarasov | CNBC<\/p>\n Arm didn’t share the cost of the new chip, but cloud AI head Mohamed Awad told CNBC in an interview that it would be “competitively priced.”<\/p>\n Chip analyst Patrick Moorhead estimates it will cost in the thousands of dollars.<\/p>\n Awad said the new chip will hopefully serve as an option for companies that can’t afford to make their own in-house processors.<\/p>\n “Arm has typically been modeled purely on their licensing and royalty business and now they have given investors a new market opportunity and business to wrap their head around and model, so it isn’t a surprise it will take some time for folks to wrap their head around the valuation and new revenue targets,” Ben Bajarin of Creative Strategies told CNBC.<\/p>\n Watch:\u00a0Inside Arm’s $71 million chip lab where its making its first ever CPU<\/a><\/p>\n