Sustainable Growth Advisers, LP on Arm Holdings plc

Arm remains a core SGA holding because demand for Arm-based CPUs and royalties continues to expand across data-center and AI workloads. The company delivered 20% revenue growth and continued licensing and royalty momentum, with management maintaining confidence in roughly 20% revenue growth. SGA sees improving share versus x86 architectures, strong pricing power and highly recurring royalty revenue as important long-term advantages. Expanding royalty rates allow Arm to capture more value across the compute stack. The fund still views Arm as a high-quality compounder, although it trimmed the position to below-average weight after strong performance because of valuation.