Arm revenue outlook clouded by US tariffs, Apple and Nvidia face supply risks

British chipmaker Arm warns of uncertainty due to Trump’s tariff threats as key clients like Nvidia and Apple confront supply chain turbulence.

The ARM logo is seen on an electronic chip board on March 4, 2025. Photo by Mohd Rasfan/AFP

By Anna Fadiah and Hayu Andini

British chip designer Arm, a key supplier to technology giants like Apple and Nvidia, warned on Wednesday that it cannot provide full-year revenue guidance due to increasing uncertainty surrounding US trade policy. The company’s announcement followed the Trump administration’s recent imposition of sweeping new tariffs on America’s trade partners, which has cast a shadow over the global technology supply chain.

Arm, majority-owned by Japan’s SoftBank, reported fourth-quarter revenue of $1.2 billion, a 34 percent year-on-year increase. However, despite the robust growth, the company issued a cautious revenue forecast for the current quarter, estimating between $1 billion and $1.1 billion in sales—at the bottom end of analysts’ expectations. The company attributed the outlook to delays in finalizing new licensing agreements and the unpredictable impact of geopolitical developments on its clients.

Arm revenue outlook reflects both the company’s financial forecast and the broader risks to the semiconductor sector driven by trade tensions.

Trump’s tariffs shake global chip ecosystem

President Donald Trump’s early-April move to introduce sweeping “reciprocal” tariffs on major trading partners sent immediate shockwaves through international markets. Although the latest trade restrictions have yet to directly affect Arm’s performance for the quarter ending in March, company executives acknowledged that the outlook for the rest of the year remains murky.

“We have lower visibility than normal into client demand,” said Jason Child, Arm’s chief financial officer. “Some of our larger licensing agreements are still being negotiated, and this creates uncertainty about our revenue pipeline going forward.”

Industry watchers note that these licensing delays may be tied not just to market conditions but also to clients' hesitation as they await further clarity on tariff enforcement and import regulations. As of now, Arm has opted not to issue revenue guidance for its 2026 financial year, underscoring the broader market's unpredictability.

Apple and Nvidia navigate rising trade risks

Arm’s customers—especially Apple and Nvidia—are also grappling with the ripple effects of escalating trade tensions. Apple initially faced inclusion in the Trump administration’s tariff plan but was temporarily exempted following industry lobbying. Still, the threat of renewed restrictions looms, especially as the administration launches a national security review that could lead to further tariffs on semiconductor imports and electronics.

Meanwhile, Nvidia, one of Arm’s largest partners in the artificial intelligence (AI) chip segment, is already contending with US-imposed restrictions on exports to China. These limits have disrupted Nvidia’s access to one of its most important markets and could deepen if new rounds of tariffs materialize.

While the full impact of the tariff regime remains to be seen, it is increasingly evident that major hardware manufacturers and their suppliers are being forced to adjust both strategy and logistics.

Strong earnings but cautious future

Despite the cloudy outlook, Arm’s recent performance was largely in line with Wall Street expectations. Revenue for the fiscal year ending in March 2025 rose by 24 percent to $4 billion. However, net income dipped 6 percent, from $224 million in the previous year to $210 million.

Arm’s business model, which depends heavily on royalty payments and licensing fees for its chip designs, leaves it exposed to fluctuations in customer activity. Delays in licensing signings—especially with larger tech clients—can significantly affect short-term revenue forecasts, a vulnerability exacerbated by geopolitical uncertainty.

Still, Arm remains one of the primary beneficiaries of the booming demand for AI chips. The company’s architectural designs are embedded in nearly every smartphone and a growing number of servers and edge AI devices. That structural importance has positioned it as a key player in the global tech supply chain, even as that very supply chain becomes more vulnerable to political disruption.

Market reaction reflects investor caution

Following the earnings release, Arm’s stock fell as much as 9 percent in after-hours trading, touching $113 per share. As of Wednesday’s market close, the company’s shares were down approximately 3 percent since the beginning of the year.

This decline marks a reversal from the surge in Arm’s stock during 2024, when the company rode the wave of explosive AI investment by tech giants including Microsoft, Meta, and Google. That growth helped fuel a successful US IPO in September 2023, which reintroduced Arm to public markets after its acquisition by SoftBank. The Japanese conglomerate still owns around 90 percent of the chipmaker.

Analysts say that while the fundamentals of Arm’s business remain strong, geopolitical risks and customer-side uncertainties are weighing on investor sentiment.

A bellwether for the semiconductor sector

The lack of forward guidance from Arm is being closely watched as a signal of what lies ahead for the broader semiconductor industry. As both consumer electronics and industrial systems become more dependent on complex chip architectures, any disruption in licensing, manufacturing, or export logistics can reverberate throughout the economy.

Arm’s revenue outlook serves as a warning shot, particularly for companies whose supply chains depend on transnational cooperation. It also reflects the growing vulnerability of even the most advanced segments of the tech economy to shifts in national policy.

Trade experts caution that continued instability in US tariff policy—especially under Trump’s administration—could lead to longer-term shifts in investment and production. Some manufacturers may even reconsider sourcing strategies or accelerate efforts to diversify away from both US and Chinese markets to reduce exposure.

Navigating a fraught global landscape

While Arm has weathered the current quarter with strong numbers, the road ahead is uncertain. The company’s decision not to provide a full-year forecast reflects not just licensing delays, but a broader lack of confidence in the policy environment.

For its partners—Apple, Nvidia, and countless others—the stakes are equally high. As the US reorients its trade strategy under Trump, tech firms are finding themselves caught in the crossfire of geopolitical gamesmanship and domestic politics. The Arm revenue outlook is a microcosm of the sector’s broader challenge: navigating innovation in an increasingly fractured global economy.