With ARM’s latest deal to provide Apple with next-generation V9 chip design, Qualcomm’s latest push to bring Nuvia’s design to Snapdragon chips for smartphones threatens ARM’s potential market share.
We view the latest cancellation threat as a competitive move to slow down Qualcomm’s expansions into AI. However, these disputes with regards to Nuvia’s work started in 2021 with Qualcomm’s acquisition of Nuvia.
Qualcomm is a M&Q expert that have tried to make bold acquisition moves in the past, including Broadcom, and we saw a few of their successful acquisitions that pushes the company’s growth over the years. Due to this strategy, Qualcomm has a balanced portfolio of revenues.
We expect market to overreact to this news but the “potential” $39 billion damages is definitely overstated by the media and ARM to damage Qualcomm’s stock price. Qualcomm’s executives definitely saw this coming as they planned to acquire Intel, fight in court(Qualcomm has won similar fights before), or could make a new deal with ARM (nothing cannot be resolved with money here).
Long-term wise, we don’t project a negative outlook for Qualcomm. On the contrary, with ARM arming up to fight Qualcomm, this shows the potential of the overall Mobile AI chip market. We see this as an opportunity to buy the dip.
Modify on 2024-10-23 18:37
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