The last quarterly performance shows that Arm Holdings is on a sharp rise, which is demonstrated by the impressive earnings of Amazon. The proprietary Graviton processors, which are based on the Arm architecture, were the proprietary cloud infrastructure with an annualized throughput of up to $10,000 billion, or a 100% growth as of February 24 2026. This progression makes Arm a major but low-profile competitor in the field of AI infrastructure.
Graviton Takes Off
Amazon Web Services CEO Andy Jassy announced that the organization continues to increase the base EC2 computing capacity every day, and most of the workloads are shifting to Graviton processors currently. These units beat traditional x86 architecture by Intel and AMD by more than 40% in price-performance per instance. Combined, the proprietary Triennium of Graviton and AWS will be worth the independent standalone market cap of at least $100 billion dollars, thus supporting the 24% sales growth of AWS to $35.6 billion dollars in the last quarter.
Arm collects royalties in every unit shipped, which in effect materializes the projected capital expenditure of the Amazon projected company of 2026 of $200 billion dollars by converting it into the real revenue streams.
Royalty Goldmine
Arm’s data-center royalty revenue doubled last quarter to over a billion dollars. Jason Child, The Motley Fool CFO, noted that most current Graviton CPUs use Arm technology, while the next-generation Graviton 5 features more cores and advanced compute subsystems, raising royalty rates.
As AI agents demand more CPU resources alongside GPUs, ARM’s market share grows. The company’s market capitalization reached $142 billion, and its share price rose 3.51% to 128.12% as of February 24. Child observed that AI compute demand is rapidly increasing, and data-center revenues may surpass smartphones within three years.
Critical Outlook
Mark Mahaney of Evercore and other analysts are skeptical about whether current capital expenditure matches the prevailing hype. Jassy, however, insists that customers will soon demand more capacity. As Amazon invests $12 billion in artificial intelligence-supporting data centers in Louisiana, ARM stands to benefit without needing to build new plants.
Risks remain, such as the possible resurgence of the x86 business or a slowdown in the shift to AI. Still, statistics show positive momentum, with ARM achieving a gross margin of 94.84% and rapidly rising sales.