(Bloomberg) -- Arm Holdings Plc shares tumbled after the chip designer gave a lukewarm revenue forecast for the fiscal year, raising concerns that the tech industry’s artificial intelligence spending spree is slowing.

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For fiscal 2025, which ends next March, revenue will be $3.8 billion to $4.1 billion, the company said Wednesday. Profit will be $1.45 to $1.65 a share. Analysts were predicting a total of $4.01 billion — representing a gain of 26% — and a profit of $1.53 a share.

The shares were down 6.6% at 9:42 a.m. in New York. Three months ago, an upbeat forecast sent its shares soaring and helped turn the company into an AI darling on Wall Street. The stock was up 41% this year through Wednesday’s close.

Arm’s chip designs and licensed standards already serve as critical technology for most smartphones. Under Chief Executive Officer Rene Haas, the UK-based company is trying to parlay that position into a bigger presence in data center hardware — where AI demands are spurring major upgrades. As part of that push, Arm is offering more complete technology blueprints to companies such as Amazon.com Inc.’s AWS.

In an interview, Haas said Arm remains “very confident in the long-term growth.”

“A lot of the strategies we put in place a couple of years ago are all coming together,” he said.

The company believes it will post a revenue growth rate of at least 20% in fiscal 2026 and 2027, Chief Financial Officer Jason Child said on a conference call with analysts.

Sales will be $875 million to $925 million in the June quarter, the chip designer said. That compares with an average analyst estimate of $868 million. Earnings per share, minus certain items, will be 32 cents to 36 cents. Wall Street was projecting 31 cents.

In the fiscal fourth quarter, ended in March, revenue was $928 million. Excluding some items, profit was 36 cents a share. That compares with average estimates of $880.4 million and earnings of 30 cents a share.

Arm has an unusual role in the semiconductor industry. It licenses the fundamental set of instructions that software uses to communicate with chips. The company also provides so-called design blocks that companies such as Qualcomm Inc. use to build their products.

Arm has been moving toward providing more complete layouts that can be taken directly to the manufacturing stage. That shift makes it more of a competitor for customers like Qualcomm, but more valuable to others — most notably, large data center owners.

Cambridge, England-based Arm is still 90%-owned by SoftBank Group Corp., which acquired the business in 2016 for $32 billion. An initial public offering in 2023 raised $4.9 billion, marking the biggest debut on a US exchange that year.

Arm’s licensing sales increased 60% to $414 million last quarter, and royalty revenue gained 37% to $514 million.

The licensing revenue is a proxy for “R&D and for confidence in investment” by tech companies, Haas said.

(Updates share price in the third paragraph.)

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