In a significant development for the semiconductor industry, Qualcomm (NASDAQ: QCOM) has achieved a partial triumph in its ongoing legal confrontation with Arm. A U.S. federal jury has determined that Qualcomm’s processors remain appropriately licensed under its existing agreement with Arm, permitting the company to advance its ambitions in the laptop processor market.
This decision comes amid a broader legal conflict following Qualcomm’s 2021 acquisition of Nuvia, which Arm (NASDAQ: ARM) alleged was a breach of licensing terms. Although the jury did not find Qualcomm in violation, the case concluded with a mistrial on one of the three primary issues, leaving some licensing questions unresolved.
Unresolved Licensing Concerns Remains Despite Favourable Ruling for Qualcomm
Despite the favorable ruling for Qualcomm, unresolved matters linger, particularly concerning royalty rates. The jury’s inability to reach a consensus on one of the central issues has left open the possibility of further legal proceedings. Arm intends to seek a retrial to address these outstanding concerns.
The legal decision had immediate repercussions in the financial markets. Arm’s shares experienced a decline, dropping by 1.8%, while Qualcomm’s shares saw a corresponding increase of the same percentage.
QCOM Stock Brief
Qualcomm’s stock has shown a positive trajectory following the legal decision, with its current price at $152.89 in premarket trading on December 23, 2024.
This marks an increase from the previous close of $150.40. The stock opened at $150.00, reaching a day high of $154.57 and a low of $149.43. Over the past year, Qualcomm’s stock has fluctuated between a low of $134.94 and a high of $230.63. With a market capitalization of $169.86 billion and a robust financial profile, Qualcomm remains a strong player in the technology sector.
Analysts maintain a positive outlook on Qualcomm’s stock and recommend buying. The analyst target prices range from a low of $160.00 to a high of $270.00, with a mean target of $204.70 and a median of $200.00.
These projections suggest the potential for growth in the stock’s value, driven by Qualcomm’s strategic market positioning and ongoing innovations. The company’s financial metrics, including a dividend yield of 2.22% and a forward P/E ratio of 12.45, further support its attractiveness as an investment opportunity.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
