LongGameEquity
Long-Term Investor, AI & Software
Qualcomm could protect margins by avoiding $1.5B in Arm royalties and gain leverage in royalty negotiations. Per @StockSavvyShay, a jury favored Qualcomm, but a judge has yet to decide a five-year royalty clause potentially worth about $1.5B. It is a nice little win, not a game changer. x.comÂ
Qualcomm is quietly becoming a different company, and its P/E should expand as it diversifies beyond smartphones into AI PCs, automotive, AI glasses, robotics, industrial AI and AI inference. Its Dragonwing platforms target industrial, autonomous and humanoid robots, with the IQ10 reference design reaching up to 700 TOPS, and buying PickNik, maker of the MoveIt framework, moves it into robotics software. Its mix is shifting from low-margin smartphones to higher-margin and data center revenue. x.com x.com x.com x.com x.comÂ
Qualcomm's licensing position looks stronger after a jury verdict in its dispute with Arm. StockSavvyShay reports that a five-year royalty clause potentially worth about $1.5 billion still awaits the judge's decision; the outcome could shape future licensing agreements as Arm expands into selling silicon. x.comÂ
Arm's low blended royalties leave pricing and mix leverage that makes earnings look massively understated at 110x forward P/E. It collects about 7 cents per chip overall, versus $1 on compute and networking chips and $0.85-$0.90 on smartphones. An 8-cent bump to 15 cents per chip is a hypothetical $5-6 billion royalty-revenue scenario, which would be pure cash. Mix shift and price increases are coming, though royalties may not double. x.com x.comÂ
Qualcomm's strained relationship with Arm could hurt its expansion into new markets because it needs technical support from the partner that controls the ISA. The jury awarded Qualcomm $2 on two of six licensing claims and found for Arm on the other four; Arm still has ways to cause Qualcomm pain if it chooses. x.comÂ
Qualcomm's multi-generation AWS collaboration on custom AI data center silicon and inference shows its data center customers are becoming clear. Qualcomm confirmed the AWS deal is baked into its $15 billion FY29 data center revenue target, which should remove doubt about hitting that number; investor relations confirmed this despite @bubbleboi's objection. Qualcomm remains an execution beneficiary, with its data center value moving toward the upside case. x.com x.com x.comÂ
Anduril's BlueChip partnership is huge for Qualcomm because it extends its role from radio chips to secure US military and government laptops. BlueChip uses Snapdragon X; preorders are planned for 2027, and some supplier agreements remain unfinished. x.com x.comÂ
The bearish call on Qualcomm was completely wrong. As @JDorbal1989 points out, Qualcomm renewed its global patent license agreement with Apple, effective April 1, 2027. x.comÂ
Qualcomm has upside from renewing its global patent license agreement with Apple, effective April 1, 2027. x.comÂ
Qualcomm has little downside with Amazon having come in as an investor at around $160 a share. Investors give it almost no credit for AI, wearables, robotics and auto, and those businesses can do the heavy lifting to keep the stock steady next year. x.comÂ
Apple dropping Qualcomm in favor of its own chips is a warning sign for Qualcomm. When Apple dumped Intel's chips, it marked five years of pain for Intel. Around $150 would be the right level to step in. x.comÂ
Qualcomm is winning hyperscaler data-center chip business. It reportedly landed a $60 billion AI chip deal with Amazon, spanning multiple generations per Bloomberg, along with a $4 billion investment. Its CFO says it is finalizing a second chip manufacturing deal with another major hyperscaler. x.com x.comÂ
