Qualcomm vs Intel: Which Semiconductor Giant is a Better Buy Now?

Qualcomm Technologies Inc. QCOM and Intel Corporation INTC are two leading players in the semiconductor industry. Qualcomm’s offering includes high-performance, low-power chip designs for mobile devices, PCs, XR, automotive, wearable, robotics, connectivity, and AI use cases. The company boasts a comprehensive intellectual property portfolio comprising 3G, 4G, 5G and other technologies.Intel, boasts a strong position in designing and manufacturing semiconductor solutions which are integrated in Intel products or in products of third parties such as various industrial, communication equipment makers or cloud service providers. Its chipsets are is used in data center, network systems, edge computing, commercial PCs and several other applications.With growing AI proliferation in PCs, smartphone, automotive and IoT applications, Qualcomm and Intel both the companies are steadily advancing their semiconductor portfolio to bolster their competitive edge. Let us analyze in depth the competitive strength and weaknesses of the companies to understand who is in better position to maximize gain from the emerging market trends.The Case for QualcommQualcomm is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. It recently introduced Qualcomm X85 5G Modem-RF, powered by Qualcomm’s 5G AI Processor. The solution is designed to deliver the fastest, battery efficient and most consistent 5G connectivity to Android users. The solution is already gaining market traction from the world’s leading network operators. The company is strengthening its foothold in the mobile chipsets market with innovative product launches. It had extended its Snapdragon G Series portfolio with the addition of next-generation gaming chipsets, Snapdragon G3 Gen 3, Snapdragon G2 Gen 2, and Snapdragon G1 Gen 2 chips. Samsung, one of the major smartphone manufacturers, has deployed the Snapdragon 8 Elite Mobile Platform for its premium S25, S25 Plus and S25 Ultra devices. Qualcomm has recently joined forces with IBM to scale enterprise-grade generative AI solutions for cloud and edge devices. It is also placing strong emphasis on developing advanced chipsets for the emerging market of AI PCs. The company inked agreements to acquire MovianAI to augment its efforts in fundamental AI research.Despite its initiative to ramp up its AI initiatives, Qualcomm has been facing tough competition from Intel in the AI PC market. Shift in the share among OEMs at the premium tier has reduced Qualcomm's near-term opportunity to sell integrated chipsets from the Snapdragon platform. The company is also facing stiff competition from Samsung’s Exynos processors in the premium smartphone market, while MediaTek is gaining market share in the mid-range and budget smartphone market. Apart from this Apple moves towards in house chip development is also major concern. Competition is also likely to come from formidable rivals like Broadcom and NVIDIA Corporation NVDA. Qualcomm’s extensive operations in China can be significantly impacted by growing Sino-U.S. trade hostilities.The Case for IntelIntel is strategically investing to expand its manufacturing capacity to accelerate its IDM 2.0 (Integrated Device Manufacturing) strategy. The company is undertaking various strategic decisions to gain a firmer footing in the expansive AI sector. Its latest Xeon 6 processors with Performance-cores (P-Cores) can support large AI workloads across diverse sectors. With industry leading capabilities in AI processing, the Xeon 6 family delivers the industry’s best CPU for AI at a lower total cost of ownership. The company also recently introduced a state-of-the-art AI solutions suite called Intel AI Edge Systems, Edge AI Suites and Open Edge Platform software. The solutions are designed to simplify the integration of AI at the edge for a wide range of sectors, including manufacturing, retail, media, entertainment and smart cities. Being the only major U.S.-based designer and manufacturer of semiconductor solutions, Intel is also getting support from the U.S. Government for its innovation initiatives. The company has secured $7.86 billion in direct funding from the U.S. Department of Commerce for its commercial semiconductor manufacturing projects.However, Intel derives a significant part of its revenue from China. As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. The company is also lagging behind in the GPU and AI front compared to peers such as NVIDIA and AMD. Leading technology companies are reportedly piling up NVIDIA’s GPUs to build clusters of computers for their AI work leading to exponential revenue growth.How Do Zacks Estimates Compare for QCOM & INTC?The Zacks Consensus Estimate for Qualcomm’s 2025 sales and EPS implies year-over-year growth of 11.93% and 15.95%, respectively. The EPS estimates have been trending northward over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Intel’s 2025 sales imply year-over-year growth of 0.57%, while that of EPS is projected at 47 cents per share against a loss of 13 cents per share a year ago. The EPS estimates have been trending southward over the past 60 days.Image Source: Zacks Investment Research  Price Performance & Valuation of QCOM & INTCOver the past year, Qualcomm has declined 12.4% against the industry’s growth of 2.5%. Intel has declined 39.5% over the same period.Image Source: Zacks Investment ResearchIntel looks more attractive than Qualcomm from a valuation standpoint. Going by the price/sales ratio, Intel’s shares currently trade at 1.56 forward sales, lower than 3.44 for Qualcomm.Image Source: Zacks Investment ResearchQCOM or INTC: Which is a Better Pick?Qualcomm carries a Zacks Rank #2 (Buy), while Intel has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.While both companies are strengthening and diversifying their portfolio to gain a competitive edge, Intel’s financial results in the recent quarters have been mixed. Despite its stringent cost-cutting plan and solid traction in the AI PC market, its turnaround remains clouded with uncertainty. Conversely, Qualcomm has exceeded earnings expectations in the last few quarters, underscoring its strength in its business model. Its effort to venture into new markets such as automotive, IoT and AI PC while maintaining a leadership position in the mobile chipset market is commendable. Upward revision of earnings estimates showcases investors’ confidence in the company. Hence, Qualcomm appears to be a better investment option at the moment.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks