Qualcomm Chief Executive Officer Cristiano Amon said on Wednesday that Arm Holdings has withdrawn a threat to terminate Qualcomm's license agreement with the chip technology provider.

Arm threatened to axe Qualcomm's license to develop chips based on Arm's designs. But a recent court loss convinced Arm to throw in the towel.

Qualcomm shares fell 4.2% in premarket trading on Thursday as the chipmaker's downbeat forecast for its patent licensing business overshadowed strong expectations for quarterly sales and profit.

Qualcomm on Wednesday forecast sales and profits above analyst expectations as artificial intelligence features helped fuel demand for smartphones, but its share price fell after the bell on expectations of flat revenue from its patent licensing business.