ToplineBritish chip designer Arm Holdings’ stock soared by more than 18% on Wednesday after CEO Rene Haas projected billions of dollars in revenue from its new in-house AI chip, a move analysts praised as the “most significant shift in the company’s history.” Analysts lauded the firm’s decision to produce AI chips as the “most significant shift in the company’s history.”NurPhoto via Getty ImagesKey FactsShares of Arm surged 18.3% to just under $160 as of Wednesday morning, the stock’s highest level since settling above that mark in November.Haas, who spoke during an event Tuesday, said the company’s first chip—the AGI CPU—is expected to generate $15 billion annually and help increase yearly sales to roughly $25 billion by 2031, with projections for earnings reaching $9 per share.Arm’s outlook is more than six times its $4 billion annual revenue in 2025 and a 414% increase from the $1.75 earnings per share expected in the company’s current fiscal year.Meta will be the first official customer for Arm’s new chip, and will be joined by OpenAI, Cloudlfare and SAP, the chip designer said.Citi analysts wrote in a note on Wednesday that Arm’s decision to manufacture chips and compete with Nvidia, Microsoft, Google and Amazon, each of which is a customer of Arm’s products, is the “most significant shift in the company’s history.”Raymond James analyst Simon Leopold said a shift to manufacturing chips would yield “strong” operating profit, as well as “aid growth and add a new dimension” to Arm’s earnings strategy.Big Number$14.1 billion. That’s how much was added to Arm’s market value in Wednesday’s stock rally, raising its market capitalization to $167.1 billion. The company’s market cap reached an all-time high of nearly $190 billion in 2024, before falling below $100 billion last year.Key BackgroundRumors of Arm—formerly known as Acorn—producing a chip have spread in recent weeks, and the company reportedly began developing the product as early as 2023. Arm’s introduction to the growing AI chip market followed its IPO that year, when it became the most valuable company to go public in years at the time. SoftBank had acquired Arm at a $32 billion valuation in 2016 and took the firm private, ending 18 years of being publicly traded. In 2020, Nvidia reached a deal to buy Arm for $40 billion before backing off from the acquisition in 2022 following regulatory scrutiny. Further ReadingForbesShares Of Chip Designer Arm Hit New All-Time High—Outclassing 2023 IPO PeersBy Derek Saul