Arm Holdings CEO Rene Haas told CNBC's Jim Cramer on Wednesday he is increasingly confident the company can meet Wall Street's loftier revenue expectations for its new data center chip, dubbed the AGI CPU.
"We're feeling good about it. We're feeling really good about it," Haas said on "Mad Money" from San Francisco.
The comments are significant because demand hasn't been the primary question surrounding Arm's first in-house central processing unit for data centers. Investors have instead been focused on whether the company can secure enough supply to turn that demand into revenue as chipmakers compete for limited manufacturing capacity during the artificial intelligence boom.
That execution is particularly important because the Arm's CPU marks a major expansion of its business model. The company has historically made money licensing its chip designs to customers, while the CPU represents its push into selling a complete chip of its own.
Arm first disclosed visibility into $2 billion in demand for the AGI CPU on its May earnings call, double the $1 billion it had previously outlined when it announced its first custom CPU in March. But the stock fell 10% after Arm maintained its official $1 billion revenue outlook while it worked to secure enough supply to meet the additional demand.
On July's earnings call, management said its confidence in securing the necessary supply had improved. The stock jumped more than 7% in the following session.
On Wednesday, Haas told Cramer his confidence has strengthened further.
"So what we said in the earnings call I think was May timeframe that we had visibility to $2 billion, and what we said in the last earnings call was that our confidence to achieve that $2 billion number had increased from May to July," Haas said. "Here I am in September, and what I can tell you is, Jim, I'm more confident today than I was on that July earnings."
Shares of Arm have held onto their July post-earnings gain but remain roughly 45% below their June high of $452 following a parabolic run in the first half of the year. Cramer's Charitable Trust previously owned Arm but sold the position to protect profits after its massive run-up. The stock remains in the Club's Bullpen watchlist.
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