Without question, the pursuit for mobile device supremacy is the hottest battle on the market today. But Texas Instruments has exited that business altogether. I think it's a mistake for investors to discount Qualcomm's long-term potential based on near-term headwinds. Plus, let's not take for granted that Qualcomm continues to reinvest heavily in research and development.
Management wants to make sure that Qualcomm's chip technology remains the top choice for not only Apple, but also Samsung and anyone else that is looking to grow market share. What's more, given that Apple is rumored to launch several new devices later this year, presumably a cheaper iPhone and a new iPad, Qualcomm should see more market share gain over the next couple of quarters.
The key here, though, is the cheaper or "budget" iPhone, as it is often referred. Unlike, Broadcom and say,
, Qualcomm has built a smartphone chip that works on multiple frequencies at the same time. This has been one of the hiccups rumored to prevent Apple from taking advantage of growth opportunities in China. With Qualcomm's chip and a budget iPhone, I have to expect that for both companies, the best is yet to come.
This is one of several examples of why I continue to believe in Qualcomm's business and the stock, which seems cheap at current levels. I would be adding shares until the company shows meaningful signs of slowing growth. The stock has enough momentum to reach $75 to $80 by the end of the year -- if, for no other reason than the fact that regardless of who comes out on top in the mobile race, Qualcomm wins.
At the time of publication, the author was long AAPL
This article was written by an independent contributor, separate from TheStreet's regular news coverage.