Qualcomm and Arm each issued a favorable account of the October 13 jury verdict. The more useful investment comparison is what the two businesses earn, how much cash they retain and how much growth their valuations require.
In our October 15 regular-session observations, QCOM was $176.14, up 2.04%, and ARM was $239.65, up 0.69%, against their October 14 closes. These are intraday observations rather than final closes. Share prices alone do not make one company cheaper than the other.
The same verdict, two different accounts
Qualcomm says the jury found Arm breached its architectural license agreement and interfered with its business. Arm emphasizes that it prevailed on four claims and that Qualcomm received just $2 in total nominal damages on the other two. Those are the companies' own accounts of a mixed outcome. Neither statement establishes that the entire dispute is over or that a particular future royalty reduction has been granted. Qualcomm's statement, Arm's statement.
The verdict is relevant context for a relationship that is both commercial and competitive. It is not an earnings forecast. A comparison that stops at declaring a courtroom winner misses the larger valuation question.
Two businesses at different stages
Qualcomm combines a large semiconductor products business with its patent-licensing operation. Arm earns licensing and royalty revenue, but it is no longer accurate to describe it as a company that only licenses IP: its July shareholder letter says it expanded into production silicon through the Arm AGI CPU and had delivered initial products to multiple customers. That adds opportunity and execution risk, including the possibility of competing more directly with customers. Arm shareholder letter.
The latest reported quarters end June 28 for Qualcomm and June 30 for Arm. They cover substantially the same calendar period despite carrying different fiscal-year and quarter labels.
Qualcomm reported $9.95 billion of quarterly revenue, down 4.03% year over year, and a 16.35% GAAP operating margin. Arm reported $1.29 billion, up 22.41%, with a 7.06% GAAP operating margin. Arm's revenue included $715 million of royalties and $574 million of license and other revenue; the latter should not be treated as recurring royalties. Qualcomm results.
Adjusted operating margins were 27.91% for Qualcomm and 41.19% for Arm, under their respective definitions. Those are useful reconciliations, but their exclusions differ. We compare GAAP with GAAP first rather than quietly putting one company's adjusted profitability beside the other's reported figure.
Arm's quarterly $270 million net income also deserves context: operating income was $91 million, while the results included a $128 million equity-investment gain and a $17 million tax benefit. Net profit growth therefore does not describe only the performance of the operating business.
Qualcomm has a different accounting wrinkle. The current trailing period contains both a large fiscal-2025 fourth-quarter deferred-tax valuation-allowance charge and a fiscal-2026 second-quarter release. Treating the release alone as a permanent earnings boost would ignore the charge on the other side. This is one reason to examine operating profit and cash alongside a headline P/E. Qualcomm June 10-Q.
What the valuation gap is pricing
Using the retained prices and the latest sourced share counts gives reference equity values of approximately $184.95 billion for Qualcomm and $255.95 billion for Arm. The share counts were reported as of July 27 and June 30 respectively; these are dated-share valuation references, not exact October 15 market capitalizations.
On trailing revenue, that works out to approximately 4.20 times sales for Qualcomm against 49.64 times for Arm. The difference is substantial, but a lower sales multiple does not prove a stock is undervalued. Arm's faster growth and anticipated expansion are central to its investment case; Qualcomm's case rests more heavily on converting a much larger established revenue base into cash while finding new growth.
Trailing operating cash flow less cash PP&E purchases was $10.42 billion for Qualcomm and $1.51 billion for Arm. Relative to those reference equity values, the yields were approximately 5.63% and 0.59%. This is the same simple cash calculation on both sides, not a dividend yield or a promised shareholder return.
Arm's separately defined company free cash flow is $1.40 billion, because it also subtracts intangible-asset purchases and related obligation payments. Acquisitions and financing are outside our common operating-cash-minus-PP&E measure. Stock compensation remains an economic consideration: trailing cash-flow-statement SBC was approximately 7.36% of Qualcomm revenue and 22.38% of Arm revenue. Cash generation and per-share value creation are related, but they are not interchangeable. The trailing calculations bridge the latest quarterly statements with Qualcomm's fiscal-2025 results and Arm's fiscal-2026 annual filing.
Their risks differ too. Qualcomm faces handset demand and customers developing more components themselves. Arm's expansion adds silicon execution risk to licensing exposure, while its June quarter included $388 million of related-party revenue, about 30.1% of sales. Those relationships deserve attention alongside the growth rate; revenue growth alone does not describe customer concentration or governance.
Our Insider Analyzer's July 17–October 15 scan found approximately $5.44 million of Qualcomm common-stock sales across eight transaction dates. All 20 eligible sale rows referenced Rule 10b5-1 trading plans; the scan found no eligible purchase rows. Multiple price lots on one date are not separate trading decisions. This bounded filing review is not evidence of bearish conviction or a complete account of every insider transaction. SEC ownership filings.
Both rebounds sit inside larger declines
Qualcomm's May 29 closing peak of $251.02 fell to $147.61 on July 31, a 41.20% decline. Its rebound to the October 14 close was 16.94%, leaving it 31.23% below that closing peak.
Arm's June 18 closing peak of $439.46 fell to $224.89 on July 29, a 48.83% decline. The rebound to October 14 was 5.83%, leaving it 45.84% below its June closing peak. A recovery from a low does not erase the decline that came first.
At the October 15 observations, Qualcomm was above its completed 50-day average of $174.35 and 200-day average of $169.35. The July 22 intraday high at $178.65 was a nearby upside reference. If the reclaim loses strength, the $171.02 October 8 and 14 low and the 200-day average are the next references below. Today's observed low had already crossed below both; a final daily close matters.
Arm was below its 50-day average of $269.65, but above its 200-day average of $222.19. The July 17 low at $243.12 is a nearby level to reclaim. Higher up, the residual October 12 daily gap at $263.24–$265.60 precedes the 50-day average. Below, the September 3 low at $225.46 and the 200-day average are historical references, not guaranteed floors.
Over the same 252-session interval ending October 14, Qualcomm's price return was 6.70%, Arm's 38.43% and SPY's 16.07%. That longer window tells a different story from the recent rebound. Dividends are excluded, so this is a price-performance comparison, not a total-return ranking.
What would change the comparison
Qualcomm needs to show that its established cash generation can coexist with renewed revenue growth, rather than leaving shareholders with an indefinitely shrinking sales base. Arm needs to show that royalty growth, licensing and its silicon expansion can grow operating earnings and cash per share fast enough to support its much larger sales multiple.
The valuation evidence currently places more weight on Qualcomm's existing cash generation and more expectation on Arm's future expansion. That is the investment distinction worth monitoring. Neither a positive daily candle nor either company's verdict statement settles it.
Explore Qualcomm's chart archive, Arm's chart archive, the Insider Analyzer and other comparisons.
This is market research only, not a recommendation to buy or sell.