Key Points
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Amazon’s Graviton chip revenue surpassed $10 billion annually, doubling year-over-year.
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Arm Holdings reported data center royalty revenue doubled recently, with expectations to surpass smartphone revenue within three years.
Amazon (NASDAQ: AMZN) reported Q4 earnings with plans for $200 billion in capital expenditures, contributing to a mixed market response.
Significantly, Amazon’s custom chips, including Graviton, are now generating over $10 billion in annual revenue, positioning Graviton as a major success in Amazon Web Services (AWS). This growth signifies that if Graviton were a standalone company, it could be valued at approximately $100 billion.
Arm Holdings (NASDAQ: ARM) stands to benefit substantially from this trend, having seen a boost in its royalties from data centers, which more than doubled in the last quarter. Arm’s revenue from this sector is expected to exceed that of smartphones in the next three years, driven by increasing demand for AI-related computing.
