Qualcomm ($QCOM): good value in a predictable growth tech company
I am not a chipmaker expert to understand business nuances, but Qualcomm ($QCOM) looks a very safe bet right now. $QCOM has a strong market participation with smartphone processor Snapdragon, but it is also relevant (and fast-growing) in other areas live RF front-end, IoT and autonomous vehicles. All business segments are performing very well, have long-term potential growth, and $QCOM has an established market position.

Other companies are also performing well in this business, but I specially like $QCOM. First of all, sales are expected to remain high for a long time (Snapdragon is the main option in premium android smartphones, 5G transition is only beginning and IoT will only get bigger and bigger). Unlike other tech stocks, $QCOM already is very profitable and doesn't have high multiples. The company is making more than $10 billion in cash every year and is returning most of it to shareholders.

This is a very unusual (and powerful) combination of great business, moats, profitability, fair multiples and return to shareholders. Even with short-term difficulties to slow business down, long-term seems to remain unchanged. It is hard to not like $QCOM, either from a growth, value or business point of view.
Alex Biestek's avatar
I am a $QCOM holder and I appreciate this post!
Bruno Ramos's avatar
@acb123 $QCOM looks a great company
Guilherme Oliveira's avatar
$QCOM is an excellent company that have a market leadership in an vital product (smartphone processors) and have IP to keep developing leading edge technology in multiple ends (connectivity, data processing and intelligence to the edge). I also appreciate the mindset of current administration to seek revenue diversification and operating efficiency. As for now, great stock to long-term value generation to shareholders.
Rickson Mesquita's avatar
I don't have $QCOM and I have other preferences in this industry, but I agree their numbers are good as it is also well positioned for the next few years! Great post (as always)!
Reasonable Yield's avatar
Thanks for sharing, do you own shares?
Arthur Svidzinski's avatar
@reasonableyield No, I do not own any shares. I will start to add disclaimer information on the next posts.