Late last Friday afternoon, inside the U.S. District Courthouse in Wilmington, Del., the jury in a bitter case between two computer-chip giants, Arm Holdings ARM and Qualcomm QCOM, handed a win to Qualcomm — with an asterisk.Qualcomm, the defendant, got most of what it asked. The jury decided that: ...

Qualcomm Inc QCOM gains significant leverage in future litigation after securing a critical legal win against Arm Holdings Plc ARM, according to JPMorgan analyst Samik Chatterjee.What The Court Said: A Delaware District Court ruled that Qualcomm's acquisition of Nuvia did not violate Arm's Architecture License Agreement (ALA), securing the designs under Qualcomm's license. While the verdict didn't resolve all questions about Nuvia's prior actions, it eliminates fears of canceled licenses or disruptive finan ...

U.S. stock futures were mixed this morning, with the Dow futures falling around 0.2% on Monday.Shares of Arm Holdings plc ARM fell sharply in today's pre-market trading after a US jury reportedly found Qualcomm QCOM did not breach Nuvia’s license agreement with the company.Arm Holdings shares fell 2.3% to $129.14 in the pre-market trading session.Here are some other stocks moving lower in pre-market trading.Core Laboratories Inc. CLB shares dipped 11% to $15.00 in pre-market trading.Astria Therapeutics, Inc ...

This article has been reviewed according to Science X's editorial process and policies . Editors have highlighted the following attributes while ensuring the content's credibility: Arm says it plans to seek a new trial on a count that left jurors unable to agree in its licensing dispute with longtime industry partner Qualcomm. A federal jury in the United States on Friday delivered a key win to mobile commputing titan Qualcomm in a licensing dispute with Arm, although proceedings between the chipmakers end ...

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Arm Holdings sued Qualcomm over the alleged breach of a licensing agreement. But a jury today found it could not reach a conclusion on one of the allegations and found in favor of Qualcomm on another.Arm sued Qualcomm after Qualcomm acquired Arm licensee Nuvia for $1.4 billion. The jury could not come to an agreement on whether Nuvia breached its license agreement, but it also said ...

Core Viewpoint - The legal trial between Arm and Qualcomm, which began this week in Delaware, stems from a two-year dispute over a licensing agreement and could significantly impact the chip industry, including mergers and acquisitions and intellectual property rights [1][11]. Group 1: Legal Dispute Overview - The trial is a result of a lawsuit filed by Arm against Qualcomm in August 2022, alleging breach of contract and trademark infringement [4]. - The dispute centers on Qualcomm's $1.4 billion acquisition of chip startup Nuvia in 2021, which had a license to use Arm's architecture for server chip design [2][5]. - Arm claims Qualcomm failed to properly transfer the licensing agreement after acquiring Nuvia, as Qualcomm reassigned Nuvia engineers to work on a laptop processor [6][7]. Group 2: Financial Implications - Qualcomm pays Arm approximately $300 million annually in licensing fees, making the outcome of the trial critical for both companies [2]. - Arm is not seeking monetary damages but is requesting the destruction of any products developed using its intellectual property without proper licensing [10]. Group 3: Industry Impact - The trial could have far-reaching consequences for IP licensing agreements, mergers and acquisitions, and contract law within the tech industry, affecting the entire electronics ecosystem and supply chains [11]. - The case may disrupt the development of AI computers, as Arm has indicated that Qualcomm used designs based on Nuvia engineering for new low-power AI PC chips [12].

Core Viewpoint - Arm Holdings plc (ARM) stock has experienced a remarkable 97% rally this year, significantly outperforming the internet software industry's 45% rally, driven by excitement around advanced artificial intelligence (AI) and associated hardware [1] Group 1: ARM's Market Position - Arm Holdings has a dominant presence in the semiconductor industry, particularly in mobile devices, with a low-power architecture that has been a staple for decades [4] - The company is well-positioned to benefit from the growth of AI and the Internet of Things (IoT), as ARM-powered chips are being integrated into smart devices, autonomous systems, and data centers [5] Group 2: Business Model and Financial Health - Arm Holdings operates a licensing and royalty structure, earning royalties on every chip sold, which provides a steady revenue stream without significant capital expenditure [6] - Following its IPO, Arm Holdings has a strong balance sheet with $2.4 billion in cash and no debt, allowing for funding of research and development initiatives and strategic acquisitions [7] Group 3: Earnings and Sales Estimates - The Zacks Consensus Estimate for ARM's fiscal 2025 earnings is $1.55, indicating a 22% growth from the previous year, with fiscal 2026 earnings expected to increase by 33.4% [9] - Sales are projected to rise by 21.9% and 25.1% year over year in fiscal 2025 and 2026, respectively [11] Group 4: Valuation Concerns - ARM stock is currently considered expensive, trading at around 77 times forward 12-month earnings per share, significantly higher than the industry's average of 38 times [14] - The trailing 12-month EV-to-EBITDA ratio for ARM is approximately 224.5 times, far exceeding the industry's average of 8.5 times [14] Group 5: Investment Timing - While Arm Holdings remains a strong player in the semiconductor industry with a solid foundation for future growth, timing the entry is crucial for maximizing returns, suggesting that investors may want to wait for a more attractive entry point [15]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

The artificial intelligence (AI) stock craze, although it's moderated some in recent times, is a long-tail trend that began around two years ago. Many investors are understandably convinced that the technology is going to be ubiquitous before long, and they're still scrambling to find investments that might take good advantage of this trend. One of the more durable AI stock plays, U.K.-based ARM Holdings (ARM 0.69%), saw another professional researcher recently join the crowd of bulls tracking it. He thinks ...

Core Insights - Arm Holdings has been one of the top-performing AI stocks over the past year, with a trading increase of 119% [1] Revenue Model - Arm does not generate revenue like typical semiconductor companies; it licenses its CPU architecture to partners such as Nvidia and Apple, collecting royalties when products are sold [2] - The two main sources of revenue for Arm are licensing and royalties, with royalties generally being the larger source [2][4] License Revenue - License revenue is crucial as it provides an early indication of future business performance, although it can be inconsistent from quarter to quarter [4] - In the most recent fiscal second quarter, license revenue decreased by 15% to $330 million due to a large prior license agreement [4] - Arm reports license revenue as annualized contract value (ACV), which increased by 13% to $1.25 billion in the second quarter [4] Royalty Revenue - Royalty revenue is a better reflection of current business performance and the adoption of new technologies, such as the Armv9 CPU architecture, which has a royalty rate approximately double that of the previous generation [5] - In the second quarter, royalty revenue rose by 23% to $514 million, significantly outpacing total revenue growth of only 5% [6] - Royalty revenue is influenced by the royalty rate charged and the number of products sold, indicating the market impact of Arm's technology [6] Future Outlook - Overall revenue may remain volatile in the upcoming quarters, but royalty revenue will provide a clearer picture of the business's strength [7]