This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

'No-Brainer': Qualcomm Is the Best Bargain on the Market

Stocks in this article: QCOM AAPL SSNLF INTC NVDA CHL

NEW YORK (TheStreet) -- Last August I told you that chip giant Qualcomm (QCOM) was the best way to play the semiconductor recovery. At the time, Qualcomm shares traded around $65. The stock closed Tuesday at $76.71, posting close to 20% gains since my August buy recommendation.

Last summer, after two years of strong growth, the entire chip sector was being decimated by low average selling prices. Mobile devices had become commoditized. Even worse, those in the higher-end category had become saturated. With very little growth in sight, the chip spree was seemingly over. But that was the time to buy.

Qualcomm was the obvious choice.

In August I said:

"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."

Qualcomm stock ended the year at $73.90. Ever since, the stock has made several new 52-week highs. Gone are the fears about chipset margins and market share losses. The company has begun to benefit from a slight recovery in average selling prices and stronger unit shipments -- precisely what I predicted would happen.

Had investors listened to TheStreet's Jim Cramer, who said on Dec. 13 that Qualcomm stock had a strong chance of hitting $80 per share, they would have made an easy 6% on that trade.

I don't deny that lately Qualcomm hasn't been as robust as it was in previous years. Even so, Qualcomm's results have been better than its closest rival. Plus, as long as the mobile devices race continues between Apple (AAPL) and Samsung (SSNLF), there was no way for Qualcomm to lose. And that's the point Cramer was making. Qualcomm's chip is at the center of their respective devices.

Investors should seek to understand what type of advantage this presents over rivals like Intel (INTC) and, to a lesser extent, NVIDIA (NVDA) -- which, according to some, is emerging as a new threat.

Meanwhile, Qualcomm's management was never asleep at the wheel. Although guidance over the past couple of quarters has come below consensus estimates, management remains committed to preserving Qualcomm's dominance -- particularly in next-generation chip technology. The Street understands this now.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs