No Matter Who Wins the Smartphone and AI Chip Races, ARM Stock Still Benefits

Research firm IDC published its first-quarter AI infrastructure numbers this week, and one line stood out. Arm (ARM) has overtaken x86 as the biggest platform in AI servers. Accelerated server value on Arm climbed to $53 billion in the quarter, from below $30 billion as recently as the third quarter of 2025. IDC also raised its full-year forecast for AI infrastructure spending to $497 billion.

What the report really shows is who gets paid. Arm licenses its architecture and takes a royalty payment on every chip shipped using it. For Arm, this means that the war between chipmakers is largely a war between its own customers. Apple (AAPL), Qualcomm (QCOM), Samsung (SMSN.L.IX), and MediaTek all build their smartphone chips on Arm. In fiscal 2026, ended March 31, Arm posted record revenue of $4.92 billion, up 23%, with royalty revenue of $2.61 billion. Data center royalties more than doubled year-on-year (YoY) in the fourth quarter. The newer Armv9 architecture carries roughly double the royalty rate of the previous generation. So, Arm collects more per chip at the same time as more chips ship.