Investing.com -- Arm Holdings shares erased gains and dropped over 3% on Tuesday after a Delaware jury ruled against the company in a breach of contract case brought by Qualcomm.

The jury found that Arm breached its architectural license agreement with Qualcomm, failed to honor its commitments, and intentionally acted to disrupt Qualcomm's business operations, according to a statement from Qualcomm.

The verdict, dated October 13, 2026, represents another legal setback for Arm in its ongoing dispute with the smartphone chipmaker. Qualcomm called the ruling a win for innovation and competition.

Qualcomm did not disclose whether the jury awarded damages in connection with the verdict.

Shares of Qualcomm briefly spiked higher and were trading up 2% on Tuesday following the announcement.

The legal dispute originated from Arm's 2022 lawsuit against Qualcomm over alleged contract violations following Qualcomm's $1.4 billion acquisition of chip startup Nuvia. Qualcomm won a jury verdict in December 2024, which was upheld in September 2025. Arm appealed that decision.

In the current case, Qualcomm accused Arm of multiple breaches of their licensing agreement, which extends through 2033. Qualcomm alleged that Arm withheld software patches and chip-testing tools needed to verify Qualcomm's custom Oryon CPU cores. Qualcomm also claimed Arm violated a pricing structure designed to keep Qualcomm's royalties within 10% of the lowest available design pricing.

Qualcomm further alleged that Arm deliberately leaked a 2024 license-termination warning letter to Bloomberg, which Qualcomm said damaged its business reputation and cost the company approximately $170 million in a potential deal with Meta Platforms.

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