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

Core Insights - Qualcomm and Intel are leading players in the semiconductor industry, focusing on high-performance chip designs for various applications including mobile devices, PCs, and AI [1][2][3] Qualcomm's Position - Qualcomm is well-positioned for long-term revenue growth, driven by strong 5G traction and a diversified revenue stream, transitioning from a mobile communications firm to a connected processor company [4] - The introduction of the Qualcomm X85 5G Modem-RF aims to provide efficient 5G connectivity, gaining traction among major network operators [4] - Qualcomm is expanding its mobile chipsets market presence with new gaming chipsets and partnerships, including a collaboration with IBM for generative AI solutions [5] - Despite these initiatives, Qualcomm faces competition in the AI PC market and premium smartphone segment, with challenges from Samsung, MediaTek, and Apple's in-house chip development [6] Intel's Strategy - Intel is investing in expanding manufacturing capacity as part of its IDM 2.0 strategy, focusing on AI processing capabilities with its Xeon 6 processors [7][8] - The introduction of AI solutions like Intel AI Edge Systems aims to simplify AI integration across various sectors, supported by $7.86 billion in funding from the U.S. government [8] - However, Intel's reliance on the Chinese market poses risks due to tightening U.S. export restrictions and increased competition from domestic chipmakers [9] Financial Performance and Valuation - Zacks Consensus Estimates indicate Qualcomm's 2025 sales and EPS are expected to grow by 11.93% and 15.95%, respectively, with positive trends in EPS estimates [10] - In contrast, Intel's 2025 sales growth is projected at only 0.57%, with EPS expected to recover to 47 cents per share from a loss of 13 cents per share last year [12] - Over the past year, Qualcomm's stock has declined by 12.4%, while Intel's has seen a more significant drop of 39.5% [13] - From a valuation perspective, Intel's price/sales ratio of 1.56 is lower than Qualcomm's 3.44, making Intel appear more attractive [15] Investment Outlook - Qualcomm holds a Zacks Rank 2 (Buy), while Intel has a Zacks Rank 3 (Hold), indicating a more favorable investment outlook for Qualcomm based on recent performance and earnings expectations [16][17]