Telecommunications giant Qualcomm (QCOM) is accusing semiconductor firm Arm Holdings (ARM) of anticompetitive behavior and has filed complaints with regulators across three continents. Qualcomm alleges that Arm is restricting access to its technology, thus limiting competition in the computing semiconductor market. The news was first reported by Bloomberg, calling out Qualcomm’s “worldwide antitrust campaign” against its biggest supplier, Arm.
Qualcomm has lodged complaints with the European Commission (EC), the U.S. Federal Trade Commission (FTC), and the Korea Fair Trade Commission (KFTC). According to the report, Qualcomm executives have made similar monopolistic accusations against Arm in private meetings and confidential filings with regulators.
Qualcomm and Arm Turn from Partners to Rivals
Over the past two decades, Arm has followed an open licensing model for its chip design technology, where it also had licensing deals with QCOM. This strategy led several chip makers to rely heavily on Arm’s technology. However, Arm is now reportedly trying to thwart competition as it seeks to advance its own chipmaking goals.
Both Qualcomm and Arm are trying to leverage their expertise in the growing computing market, manufacturing chips for desktops and artificial intelligence (AI) systems. Qualcomm’s Snapdragon platform is used for running high-speed AI, security, and graphics. Meanwhile, Arm’s chip design technology is widely used by chip makers across the globe.
The latest lawsuits follow a federal court hearing from December 2024 alleging Qualcomm-owned Nuvia of breaching a licensing agreement with Arm. During the trial, QCOM was acquitted on two of the three charges. First, the eight-person jury ruled that the company did not violate Nuvia’s license agreement with Arm. Second, the jury ruled that Qualcomm’s custom CPUs (Computer Processing Units) used in Microsoft’s (MSFT) PCs (Personal Computers) were legally licensed under its existing agreement with Arm.
Is Qualcomm Stock a Buy?
Analysts remain divided on Qualcomm’s stock trajectory. On TipRanks, QCOM stock has a Moderate Buy consensus rating based on 11 Buys, seven Holds, and one Sell rating. Also, the average Qualcomm price target of $203.12 implies 26.8% upside potential from current levels. In the past year, QCOM stock has lost 2.2%.
Is ARM a Good Stock to Buy?
Wall Street is also divided on Arm’s stock trajectory. On TipRanks, ARM stock has a Moderate Buy consensus rating based on 17 Buys, four Holds, and one Sell rating. The average Arm Holdings price target of $179 implies 44% upside potential from current levels. In the past year, ARM stock has lost 2.9%.
