Arm surged more than 30% on Wednesday after the British tech company forecast quarterly sales and profit above Wall Street expectations as customers aim to design new chips for artificial intelligence work, generating higher royalties.

The surge in Arm’s stock lifted its market capitalization by about $26 billion. Now trading at $102.11, Arm has doubled from the $51 price set in its September initial public offering.

“The solid Arm earnings and, even more importantly, their robust forecasts are good signs for both the company and the tech industry overall,” said Bob O’Donnell, president and chief analyst at TECHnalysis Research.

Arm executives said on Wednesday the expansion strategy was starting to pay off, with customers flocking to Arm-based central processors to complement Nvidia’s chips for AI work in data centers, and working on new laptops and smartphones that can handle chatbots and other AI features.

The midpoints of Arm’s fourth-quarter sales and adjusted profit forecasts range of $875 million and 30 cents per share, respectively, beat estimates of $780.3 million and 21 cents per share, according to LSEG data.

It raised its guidance by roughly $100 million because markets such as automotive and AI are going to be strong in the fiscal fourth quarter, finance chief Jason Child told Reuters.

The company expects licensing revenue for chips that power AI in data centers, phones and PCs to be a significant factor.