'gemstone-studded' is a compound of 'gemstone' + past participle 'studded'. 'gemstone' ultimately comes from Old French 'gemme' (from Latin 'gemma') meaning 'precious stone' combined with English 'stone' (Old English 'stān'). 'studded' comes from the verb 'to stud' (Middle English 'studen' / 'stouden'), meaning 'to set or ornament with studs or small decorative elements.'

'gem' entered English via Old French 'gemme' from Latin 'gemma'; combined with Old English 'stān' to form 'gemstone.' The verb 'to stud' appeared in Middle English referring to placing decorative studs; its past participle 'studded' came to be used adjectivally. The modern compound 'gemstone-studded' developed by joining these elements to describe objects ornamented with gems.

Originally the verb sense of 'to stud' referred to attaching studs or small projecting ornaments; over time the past participle 'studded' broadened to mean 'decorated or covered with small decorative objects.' In 'gemstone-studded' this evolved to specifically mean 'decorated with gemstones.'