Arm Holdings projected revenue of $1.38 billion for the second fiscal quarter, surpassing the average Wall Street analyst forecast of $1.35 billion, with an expected earnings per share of 47 cents, also higher than the market consensus of 45 cents. Despite the positive financial results, amid broader pressures in the semiconductor industry, investors remain cautious about the chip sector's prospects, leading to a roughly 4% decline in its stock price in after-hours trading. The company's current revenue structure is still primarily driven by royalties from mobile phone chips, but revenue from its data center business has doubled year-on-year, becoming a significant new revenue stream. Chief Executive Officer Rene Haas revealed that despite a decline in industry shipments, the company's royalty revenue continues to grow, with market demand for its new chip product lines exceeding expectations.