Sustainable Growth Advisers, LP - U.S. Large Cap Growth on Arm Holdings

SGA continues to view Arm as a durable beneficiary of growing demand for power-efficient computing and AI workloads. The company delivered approximately 20% revenue growth and continued strength in licensing and royalty expansion during the quarter. Management's guidance reinforced expectations for roughly 20% revenue growth despite anticipated weakness in handset markets. SGA sees improving share gains against x86 architectures and expanding adoption of Arm-based CPUs across data centers and AI workloads. Strong pricing power, recurring royalty revenue, and increasing royalty rates allow Arm to capture more value across the compute stack. The fund trimmed the position after strong share-price performance because of valuation considerations but remains constructive on the long-term business.