Qualcomm Benefits in the Mobile Wars
Rhodora is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Wireless communication company Qualcomm (NASDAQ: QCOM), a twenty-five year old manufacturer, developer, and marketer of telecom products and services, is but one of the many companies taking advantage of the fairly recent mobile revolution. Although it might not be as well-known as Google, which stands to earn enormous gains throughout the next few years through advertising, or Apple and Samsung, which have sold millions of smartphones, mobile devices, and apps, Qualcomm and its stock have been one of the most popular topics of discussion in its industry today. This is mainly due to its longevity in the market compared to these aforementioned companies and other tech giants, in addition to other factors. The big question is: will you make a decent profit from investing in Qualcomm?
How is Qualcomm Performing?
With a market cap of $109.29 billion, Qualcomm still expects to report a first-quarter profit of $1.12 per share with almost $6 billion in revenue, in comparison to its $0.97 on almost $4.7 billion in revenue for the last year. Shares of Qualcomm have gained more than 10% for the past year, and looks like they will continue to push forward in the near future.
Let the Chipsets Fall Where They May
Fellow chip maker Intel (NASDAQ: INTC) has been steadily lagging Qualcomm. Due to the decreasing sales of personal computers, Intel’s profits and its stock are no longer what they used to be. The company’s fourth quarter earnings for 2012 were only $2.5 billion, around 27% down from the same quarter only a year prior. Revenue also declined from $13.9 billion to $13.5, a three-percent reduction in the same time frame.
ARM Holdings (NASDAQ: ARMH), a relative newcomer to the sector, is dead set on using the decline of PC sales and the tablet/smartphone boom to its advantage. The company has done so by designing chipsets and providing licenses to manufacturers and buyers such as Apple. ARM Holdings has been raking in record amounts of revenue, in no small thanks to the popularity of iPads, iPhones, and other iGadgets. For Apple, though, the share price could use a boost; shares have tumbled from a high of $705 by twenty-nine percent. Despite it being debt-free, the high valuation of its stock means that not all traders can afford to buy in.
Is Qualcomm Worth Trading?
The brand may not be as visible or as easy to recall as its rivals in the telecom industry, but Qualcomm is definitely one to watch out for in the stock market. In addition to their proprietary and ubiquitous Code Division Multiple Access technology, or CDMA, there are numerous aspects that put it in the showing as very desirable stock and a company that is, appearances aside, highly dominant in the mobile chipset market. Its performance, although marred at times by slight dips, is supported and furthered by its solid position and competitive nature.
Qualcomm has very little debt (if any) and offers attractive valuation, as shown by its history and drive. Despite being somewhat behind the scenes compared to its more prominent contemporaries in the telecom race, this mobile chip company is no small fry in the industry.
RhodoraDagatan has no position in any stocks mentioned. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, Intel, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!