Semiconductor company Qualcomm (QCOM) has won a legal battle with processor intellectual property (IP) company Arm (ARM). This battle was fought over Qualcomm’s acquisition of Nuvia and its licensing agreement with Arm. That agreement had Nuvia paying a larger license fee to Arm, but Qualcomm switched to its lower license fee after purchasing the company. Arm sued following this, but a judge has sided with Qualcomm.
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This is a massive win for Qualcomm as it gives the company the right to maintain its current relationship with Arm. A ruling against it might have required a new licensing agreement and the destruction of some technology developed at the company.
For Arm, this battle means it has to accept that its current licensing agreement with Qualcomm also covers Nuvia. It may also change the company’s stance on future legal battles. Arm has grown more forward with its customers recently, and experts predicted additional lawsuits if it beat Qualcomm.
How This Affects QCOM Stock Today
Qualcomm stock is up 2.87% on Monday morning as investors celebrate its lawsuit win against Arm. This builds on its 7.8% increase year-to-date and also comes after a 1.66% rally on Friday.
ARM stock isn’t doing nearly as well this morning. News of the company losing its battle with Qualcomm is dragging the shares 2.08% lower in pre-market trading today. Even so, the stock is still up 75.87% since the start of the year.
Is QCOM Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus for Qualcomm is Moderate Buy based on 11 Buy, 10 Hold, and one Sell ratings. With that comes an average price target of $199.88, a high of $250, and a low forecast of $160. This represents a potential 30.73% upside for QCOM shares.
