Arm Holdings Inc. shares are trading lower, likely due to continued weakness stemming from its ongoing legal dispute with Qualcomm Inc. ( QCOM ) , which began on Tuesday, Dec. 16 2024. Here’s what you need to know.

What To Know: The case centers on Qualcomm's ( QCOM ) 2021 acquisition of Nuvia, a chip startup and the licensing agreements Arm had with Nuvia prior to the acquisition. Arm contends that the deal with Qualcomm ( QCOM ) requires renegotiation and is seeking to have Qualcomm ( QCOM ) destroy certain chip designs obtained through the Nuvia acquisition. Qualcomm ( QCOM ), on the other hand, maintains that it has its own licensing agreements with Arm, separate from those held by Nuvia, and that it has paid for the necessary intellectual property.

This legal battle between two of the largest players in the chip industry is attracting attention, as it could impact the future business dealings between Arm and Qualcomm ( QCOM ) and the broader technology sector. The case also highlights the growing rivalry between the two companies. Arm, which traditionally provided chip designs and licenses to other companies, has been moving to become more of a chip supplier itself, putting it in direct competition with Qualcomm ( QCOM ).

The trial is expected to last a week and could result in a shift in the licensing fees Qualcomm ( QCOM ) may need to pay to Arm. While some analysts predict a settlement, Qualcomm's ( QCOM ) track record in patent litigation may be adding an element of uncertainty. The case is potentially seen as a crucial moment for both companies, with potential consequences for their future business strategies and the broader chip industry.

ARM Price Action: Arm Holdings ( ARM ) shares were down 2.01% at $141.97 at the time of writing, according to Benzinga pro.

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