--- title: "Arm reports November 4 with a $2 verdict and a clause that could erase five years of Qualcomm royalties" description: "Arm reports fiscal Q2 on November 4, five days after a single session took 11.6% off the stock. The quarter must clear a $1.38 billion revenue guide while a Delaware judge weighs a clause that could cut Qualcomm's royalties to zero for five years." publisher: "The Inference" section: "Chips" published: 2026-10-31T15:20:08.552Z modified: 2026-10-31T15:20:08.552Z canonical: https://theinference.org/article/arm-reports-november-4-with-a-2-verdict-and-a-clause-that-could-erase-five-years-of-qualcomm-royalties language: en keywords: "Arm Holdings, Qualcomm, Chips, Earnings, Legal" --- # Arm reports November 4 with a $2 verdict and a clause that could erase five years of Qualcomm royalties > Arm reports fiscal Q2 on November 4, five days after a single session took 11.6% off the stock. The quarter must clear a $1.38 billion revenue guide while a Delaware judge weighs a clause that could cut Qualcomm's royalties to zero for five years. ## An 11.6% session set the table [Arm](https://theinference.org/markets/companies/arm) Holdings (Nasdaq: ARM), the SoftBank-linked chip designer whose blueprints run in more than 99% of smartphones, reports fiscal second-quarter results on Wednesday, November 4, after the US close [5][8]. On October 30 the stock [lost 11.60% in one session against a 5.42% sector decline](https://www.tradingkey.com/news/market-movers/262261236-market-movers-arm-20261030), with [Intel](https://theinference.org/markets/companies/intel) down 30.32% in a rate-driven tech rout [1]. TradingKey named the [Qualcomm](https://theinference.org/markets/companies/qualcomm) licensing dispute among the drivers, alongside a trailing price-to-earnings multiple above 200x [1]. ## The $1.38 billion bar and the $2 billion order book Management [guided revenue to $1.38 billion, plus or minus $50 million, adjusted earnings to $0.47 a share](https://www.ad-hoc-news.de/boerse/news/corporate-news/arm-holdings-stock-faces-november-test-as-ai-supply-stays-in-focus/70434023), and royalty revenue to low-teens growth [2]. The June quarter before it brought $1.289 billion, up 22.4% year over year, with data-center royalty revenue more than doubling [2][9]. Beyond royalties sits the Arm AGI CPU, a 136-core data-center chip launched in March with [Meta](https://theinference.org/markets/companies/meta) as lead partner [5]. [Demand tops $2 billion](https://theinference.org/article/arm-can-see-2-billion-of-demand-for-its-first-chip-it-commits-to-half); secured manufacturing capacity covers about $1 billion of revenue across fiscal 2027 and 2028 [2][7]. Chief Executive Rene Haas called the market for memory, test equipment, substrates and [TSMC](https://theinference.org/markets/companies/tsmc) wafers "very tight" [2], and first shipments are slated for the end of calendar 2026 [7]. *Chart: **Guided September quarter of $1.38B tops the year-ago print by 22%** Column chart of Arm quarterly revenue from September 2024 through June 2026, plus the guided September 2026 quarter of $1.38 billion.* *Reported quarterly revenue in US$ billions from Arm's SEC filings; final column is management guidance of $1.38B ±$50M for the quarter ended September 2026. Sources: Arm SEC filings; ad-hoc-news. [9][2]* ## Two dollars, with a $1.5 billion clause behind it On October 13 [a Delaware jury found Arm breached its architecture license with Qualcomm](https://www.eetimes.com/qualcomm-wins-key-claims-against-arm-but-damages-total-just-2/), withheld certification tools, and intentionally interfered with Qualcomm's dealings with Meta: one dollar per claim, two dollars total [4][5][6]. The jury rejected Qualcomm's pricing claims [4][5]. The money now sits with Judge Maryellen Noreika. [Section 8.3 of the license can cut royalty rates to zero for five years if a breach goes uncured](https://www.forbes.com/sites/tiriasresearch/2026/10/15/qualcomm-vs-arm-the-jury-verdict-is-in-who-came-out-on-top/) [6]; Qualcomm pays Arm roughly $300 million a year, near 9% of Arm's $4.92 billion fiscal-2026 revenue, so the clause is worth about $1.5 billion [5]. Closing arguments ran on October 20 and no ruling date is set [5][6]. The jury priced the breach at two dollars; the clause behind it can erase five years of royalties. ## What the call answers, and what it cannot Arm's counter reads well: four of six claims won, a $2 award the company says confirms good faith, and a Moderate Buy consensus at $303.32, with [Bank of America](https://theinference.org/markets/companies/bank-of-america) at $335 and [Wells Fargo](https://theinference.org/markets/companies/wells-fargo) at $280, against a $205.97 Nasdaq quote [3][5][8]. At more than 200x trailing earnings, though, the courtroom tail is barely discounted [1]. *Chart: **Street targets sit up to 63% above the $205.97 quote** Bar chart of Arm price targets ahead of the November 4 report: Bank of America at $335, the consensus at $303.32, Wells Fargo at $280, against a $205.97 Nasdaq quote.* *Analyst price targets and the Nasdaq quote ahead of the November 4 report, in US dollars. Sources: ad-hoc-news, October 26; Arm Investor Relations. [3][8]* The tail sits with Arm shareholders; a suspension would bank roughly $1.5 billion with Qualcomm. The November 4 call answers the royalty line and the AGI CPU schedule. The five-year clause answers to Judge Noreika alone, on no stated clock. ## Takeaway The November 4 print must clear a $1.38 billion guide, but the bigger tail is Judge Noreika's call on a clause that could erase five years of Qualcomm royalties, worth about $1.5 billion. ## Sources 1. [TradingKey, "Arm Holdings PLC Stock (ARM) Moved Down by 11.60% on Oct 30: Facts Behind the Movement", 30 October 2026](https://www.tradingkey.com/news/market-movers/262261236-market-movers-arm-20261030) 2. [ad-hoc-news, "Arm Holdings stock faces November test as AI supply stays in focus", 31 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/arm-holdings-stock-faces-november-test-as-ai-supply-stays-in-focus/70434023) 3. [ad-hoc-news, "Analysts target Arm Holdings stock at USD 303.32 ahead of results", 26 October 2026](https://www.ad-hoc-news.de/boerse/news/corporate-news/analysts-target-arm-holdings-stock-at-usd-303-32-ahead-of-results/70413836) 4. [EE Times, Pablo Valerio, "Qualcomm Wins Key Claims Against Arm, but Damages Total Just $2", 19 October 2026](https://www.eetimes.com/qualcomm-wins-key-claims-against-arm-but-damages-total-just-2/) 5. [Tech Times (MSN), Caleb Pittmann, "Qualcomm jury finds Arm in breach; $2 verdict unlocks billion-dollar royalty suspension fight", 14 October 2026](https://www.msn.com/en-us/money/general/qualcomm-jury-finds-arm-in-breach-2-verdict-unlocks-billion-dollar-royalty-suspension-fight/ar-AA2efrXQ) 6. [Forbes, Tirias Research (Francis Sideco), "Qualcomm Vs. Arm: The Jury Verdict Is In. Who Came Out On Top?", 15 October 2026](https://www.forbes.com/sites/tiriasresearch/2026/10/15/qualcomm-vs-arm-the-jury-verdict-is-in-who-came-out-on-top/) 7. [24/7 Wall St, "Arm's Shift From Royalties to Silicon Manufacturing Could Reshape Chip Economics", 21 September 2026](https://247wallst.com/investing/2026/09/21/arms-shift-from-royalties-to-silicon-manufacturing-could-reshape-chip-economics/) 8. [Arm Investor Relations, earnings calendar and stock quote, retrieved 31 October 2026](https://investors.arm.com/) 9. [Arm Holdings plc, quarterly figures from its SEC filings, retrieved 31 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001973239) --- Arm reports November 4 with a $2 verdict and a clause that could erase five years of Qualcomm royalties — The Inference. Canonical: https://theinference.org/article/arm-reports-november-4-with-a-2-verdict-and-a-clause-that-could-erase-five-years-of-qualcomm-royalties