The recent legal wrangling between UK chip architecture designer Arm Holdings (ARM:NASDAQ) and one of its major clients Qualcomm (QCOM:NASDAQ) is likely to be one of the big talking points when the firm reports second-quarter earnings for fiscal 2025 next week (6 November).

The dispute is over a license agreement which Qualcomm obtained through its acquisition of Nuvia back in 2021.

Arm has been unable to say anything about the spat recently due to its pre-earnings ‘closed period’, so the market will expect some level of clarification in response to what appears to be an escalation of the saga.

Analysts at Citi are not alone in reading speculation that Arm could dump Qualcomm as a client as nothing more than a tactic in its ongoing negotiations to get a bigger cut of revenue from chips Qualcomm is designing using Arm technology.

However, it does highlight the complexities of licensing agreements and negotiations in the tech industry, especially when significant revenue streams and partnerships are involved.

Legal dispute aside, Arm has been enjoying a banner year thus far, with sales guidance for fiscal 2025 pitched at between $3.8 billion and $4.1 billion, a sizeable jump on last year’s $3.23 billion.

The stock has rallied 117% year to date and was a recent inclusion in the PHLX Semiconductor Sector Index, a benchmark for the semiconductor market segment, marking a significant milestone in its growth.

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