A federal jury in Delaware awarded Qualcomm nominal damages of $2 on Monday, finding that Arm Holdings breached its architectural licensing agreement and intentionally interfered with Qualcomm’s business relationship with Meta Platforms following a five-day trial. The ruling, delivered October 13, 2026, concludes a high-stakes phase of litigation between the two semiconductor giants.
The verdict escalates the conflict between the two companies, which has been strained since SoftBank Group acquired control of Arm in 2016. While Arm secured favorable rulings on four claims, the jury’s determination that the company breached its long-standing Architectural License Agreement (ALA) by withholding software tools and disrupting commercial operations supports Qualcomm’s position. Qualcomm, which is currently at the center of the AI boom, relies on Arm architecture for its Snapdragon CPU designs. The company’s Oryon CPU cores—the engine behind its Snapdragon X PC chips—are an ALA-derived custom design.
Meta Deal Interrupted and Royalty Demands in Court
The trial, overseen by US District Judge Maryellen Noreika, centered on allegations that Arm leaked a 2024 confidential letter to Bloomberg News that notified Qualcomm of a supposed breach. Qualcomm attorney Karen Dunn argued that this leak interfered with a prospective business deal with Meta Platforms. According to Dunn, by the time Qualcomm finally secured the agreement with Meta, the value of the deal had decreased by $170 million. Delay is costly,
she told the jury.
Arm’s defense, led by Kirkland & Ellis counsel Gregg LoCascio, argued that the business shift occurred because Meta pivoted toward AI eyeglasses and away from virtual reality hardware, necessitating a change in financial terms for Qualcomm chips. They were not harmed in the least,
LoCascio asserted to the jury. Despite the verdict, Arm maintains that the $2 award reflects the merit of its own arguments and that it acted in good faith under its technology license agreement.
Alongside the jury’s findings, Judge Noreika is presiding over a bench trial concerning the potential suspension of royalty payments for up to five years. This portion of the case remains in her hands, with a resolution expected in the coming weeks.
Pricing Power and the Shift Toward Data Centers
The broader commercial dispute hinges on how Arm prices its newer chip architectures. Qualcomm CEO Cristiano Amon testified during the proceedings, facing questions about whether the current deal structure—which includes a 2013-era royalty cap—remains viable for modern chips.
Years of Litigation and Market Outlook
This dispute follows earlier litigation initiated by Arm in 2022 after Qualcomm acquired Nuvia. Arm has since filed an appeal with the US Court of Appeals for the Third Circuit.
Among 32 analysts, 20 rate Arm stock as a “Strong Buy,while eight rate it as a
Hold.” The stock has recently surpassed its average target price of $292.72, with some analysts forecasting a 63% rally over the next 12 months. Qualcomm, meanwhile, maintains a strong position in the AI era, enabling intelligence across devices from personal electronics to large-scale infrastructure. As the legal battles continue, both companies remain focused on their respective commercial goals: Arm through its licensing and growing hardware portfolio, and Qualcomm through its Snapdragon and Oryon computing platforms.
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