Why Arm Stock Popped Today

Shares of Arm Holdings (NASDAQ: ARM) jumped on Thursday after CEO Rene Haas said he believes the semiconductor designer is on track to generate $2 billion from its new artificial intelligence ( AI ) chip.

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Arm's new AI chip has received a strong customer response. So much so that the chipmaker has struggled to produce enough of them. It's a good problem to have, but it's weighed on Arm's stock price nonetheless.

During an interview with CNBC's Jim Cramer on Wednesday, Haas said supply constraints were easing for its Arm's new AGI CPU data center chip.

Back in May, Haas pegged customer demand for the chip at $2 billion. Yet ARM guided for only $1 billion in revenue due to supply shortages.

Now, however, Haas is more confident that Arm can satisfy that $2 billion in demand.

"We're feeling good about it," Haas said. "We're feeling really good about it."

Arm has a lot riding on its new chip. The semiconductor leader has long licensed its architectures to other chipmakers. The AGI CPU marks Arm's first attempt at marketing its own fully developed chip.

The AI central processor market is a massive opportunity. One that's set to grow roughly fivefold to $170 billion by 2030, according to Bank of America .

So, any positive news regarding the success of Arm's AGI CPU is likely to be met by cheers from investors.

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