American chipmaker Qualcomm (QCOM) has made arrangements to produce its latest premium chips with the aid of semiconductor firm Arm Holdings’ (ARM) newest technology for chip design, Reuters reported, citing inside sources. QCOM stock traded in the red as of 11:20 a.m. EDT.
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The technology is called Armv9 and is a proprietary instruction set architecture that directs the behaviour of computer processors. The shift is expected to help raise Arm’s revenue. ARM stock jumped nearly 4% on Wednesday morning.
The revelation comes at a time Qualcomm is locked in a protracted legal dispute with Arm Holdings over an alleged license breach. On Wednesday, Qualcomm announced that it had secured a “complete victory” in the case before a district court, but Arm vowed to “immediately file an appeal” against the judgment. This is even as Arm, about a year ago, reportedly sought to cancel its licensing agreements with Qualcomm.
Arms Launches Lumex
Meanwhile, the latest update also follows Arm’s launch of the Lumex AI-powered chip design platform earlier this month. Lumex is an advanced chip design platform optimized for on-device AI workloads across mobile devices, wearables, and next-gen consumer hardware.
The platform is built on the ninth generation of Arm’s computing architecture, specifically the ARMv9.3-A architecture.
Qualcomm Races for PC Chip Market
Meanwhile, Qualcomm’s shift towards ARM’s computing architectures comes a few days after the chipmaker, known for its Snapdragon processors for mobile phones, unveiled its “unmatchable” new chips for personal computers. Qualcomm has recently delved into the PC market, launching a series of chips for both PCs and smartphones, including the personal computer chip Snapdragon X2 Elite.
This places it in a position to compete against consumer electronics giant Apple (AAPL) and Taiwan-based smartphone chipmaker MediaTek. Both companies are believed to also rely on Arm’s technology for the design of their own custom chips.
Earlier this year, Apple unveiled the M3 Ultra, which it called “the highest-performing chip” it has ever created. The company has been making its own custom chips after shelving its previous licensing model.
Is QCOM a Good Buy Now?
On Wall Street, Qualcomm’s shares currently have a Moderate Buy consensus rating, as seen on TipRanks. This is based on 10 Buys, seven Holds, and one Sell assigned by 18 Wall Street analysts over the past three months. Moreover, the average QCOM price target of $181.67 indicates a potential increase of 9.85%.
