We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Qualcomm (QCOM) Faces Chipmaker Arm Lawsuit for Contract Breach
Read MoreHide Full Article
Qualcomm Incorporated (QCOM - Free Report) is bracing for a likely prolonged legal battle as fellow chipmaker Arm has filed a lawsuit in the federal district court in Delaware alleging a breach of contract and trademark infringement. Although Qualcomm has been no stranger to licensing disputes, the current litigation has the potential to disrupt one of its biggest acquisitions and undo its broader initiative to make inroads within the PC and server market.
The bone of contention relates to Qualcomm’s Nuvia buyout for $1.4 billion in 2021 and designs developed under Nuvia’s license agreements with Arm. The lawsuit alleges that since Qualcomm had not sought Arm’s approval to continue using the designs post-acquisition, it has violated the licensing contract and infringed its patent rights. Arm is reportedly seeking an injunction requiring Qualcomm to destroy all the contentious designs and unspecified damages for the contract breach.
Qualcomm has argued that it was beyond the purview of Arm to transgress on Nuvia’s design innovations. It further pointed out that it has a separate licensing agreement with Arm and did not infringe upon any licensing rights.
Qualcomm had earlier relied on Arm for its computing core chips. However, it gradually began to fall behind its competitors, with Arm reportedly slackening its pace of design innovations. This led the companies to fall out. The Nuvia buyout was aimed to gain a firmer footing in the PC and laptop market and eventually help Qualcomm make inroads in the lucrative server business.
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, would further offer the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
Qualcomm is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. The company is currently aiming to diversify its business. It is witnessing healthy traction in EDGE networking that helps to transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are also fueling emerging automotive industry trends such as growth of connected vehicles, the transformation of the in-car experience and vehicle electrification.
The stock has lost 8.8% over the past year compared with the industry’s decline of 14.1%. We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
Clearfield delivered an earnings surprise of 33.9%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 101.9% since August 2021. Over the past year, Clearfield has gained a solid 153.1%.
Viasat, Inc. (VSAT - Free Report) , carrying a Zacks Rank #2 (Buy), is another key pick. The company attracts millions of U.S. consumers and enterprises with its high-quality broadband service.
Viasat’s impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. Viasat has a competitive advantage in bandwidth economics, global coverage, flexibility and bandwidth allocation, making it believe that mobile broadband will act as a profit churner.
Aviat Networks, Inc. (AVNW - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 19.8% upward since August 2021.
Aviat Networks pulled off a trailing four-quarter earnings surprise of 15.9%, on average. It has soared 187.1% in the past two years.
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Qualcomm (QCOM) Faces Chipmaker Arm Lawsuit for Contract Breach
Qualcomm Incorporated (QCOM - Free Report) is bracing for a likely prolonged legal battle as fellow chipmaker Arm has filed a lawsuit in the federal district court in Delaware alleging a breach of contract and trademark infringement. Although Qualcomm has been no stranger to licensing disputes, the current litigation has the potential to disrupt one of its biggest acquisitions and undo its broader initiative to make inroads within the PC and server market.
The bone of contention relates to Qualcomm’s Nuvia buyout for $1.4 billion in 2021 and designs developed under Nuvia’s license agreements with Arm. The lawsuit alleges that since Qualcomm had not sought Arm’s approval to continue using the designs post-acquisition, it has violated the licensing contract and infringed its patent rights. Arm is reportedly seeking an injunction requiring Qualcomm to destroy all the contentious designs and unspecified damages for the contract breach.
Qualcomm has argued that it was beyond the purview of Arm to transgress on Nuvia’s design innovations. It further pointed out that it has a separate licensing agreement with Arm and did not infringe upon any licensing rights.
Qualcomm had earlier relied on Arm for its computing core chips. However, it gradually began to fall behind its competitors, with Arm reportedly slackening its pace of design innovations. This led the companies to fall out. The Nuvia buyout was aimed to gain a firmer footing in the PC and laptop market and eventually help Qualcomm make inroads in the lucrative server business.
Qualcomm is one of the largest manufacturers of wireless chipsets based on baseband technology. The company is focusing on retaining its leadership in 5G, chipset market and mobile connectivity with several technological achievements and innovative product launches. It is likely to help users experience a seamless transition to superfast 5G networks, delivering low-power resilient multi-gigabit connectivity with unprecedented range and Qualcomm's best-in-class security. This, in turn, would further offer the flexibility and scalability needed for broad and fast 5G adoption through accelerated commercialization by OEMs.
Qualcomm is reportedly the only chipset vendor with 5G system-level solutions spanning both sub-6 and millimeter wave bands and one of the largest RF (radio frequency) front-end suppliers with design wins across all premium-tier smartphone customers. The company is currently aiming to diversify its business. It is witnessing healthy traction in EDGE networking that helps to transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are also fueling emerging automotive industry trends such as growth of connected vehicles, the transformation of the in-car experience and vehicle electrification.
The stock has lost 8.8% over the past year compared with the industry’s decline of 14.1%. We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold) stock.
Image Source: Zacks Investment Research
Clearfield, Inc. (CLFD - Free Report) , sporting a Zacks Rank #1 (Strong Buy), is a solid pick for investors in the industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearfield delivered an earnings surprise of 33.9%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 101.9% since August 2021. Over the past year, Clearfield has gained a solid 153.1%.
Viasat, Inc. (VSAT - Free Report) , carrying a Zacks Rank #2 (Buy), is another key pick. The company attracts millions of U.S. consumers and enterprises with its high-quality broadband service.
Viasat’s impressive bandwidth productivity sets it apart from conventional and lower-yield satellite providers that run on incumbent business models. Viasat has a competitive advantage in bandwidth economics, global coverage, flexibility and bandwidth allocation, making it believe that mobile broadband will act as a profit churner.
Aviat Networks, Inc. (AVNW - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 19.8% upward since August 2021.
Aviat Networks pulled off a trailing four-quarter earnings surprise of 15.9%, on average. It has soared 187.1% in the past two years.