We recently published a list of Top 10 Semiconductor Stocks to Buy Now. In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against other top semiconductor stocks to buy now.
The global semiconductor industry reported a collective revenue of $626 billion in 2024, an 18.1% increase YoY, as per Gartner. Data centers accounted for the second largest sector for semiconductors, behind Smartphones, with revenues in this sector nearly doubling from $64.8 billion in 2023 to $112 billion in 2024. The International Data Corporation estimated that global demand for semiconductors will grow by 15% in 2025.
The U.S. semiconductor sector is a critical component of the global technology landscape, and its performance has significant implications for the broader economy. In recent years, the industry has experienced both growth and challenges, shaped by several factors. According to analysts, the growth is driven by the increasing reliance on technology in various sectors, including consumer electronics, automotive, healthcare, and artificial intelligence.
The industry has been at the forefront of technological innovation, with companies investing heavily in research and development. This has led to the development of more advanced chips, such as those using smaller process nodes and new materials, enabling greater performance and efficiency. The rapid pace of technological innovation continues to drive demand for more advanced semiconductors. As mentioned earlier, the rise of artificial intelligence (AI) and other emerging technologies is particularly important as these applications require high-performance chips that US companies are well-positioned to provide.
The semiconductor industry is highly competitive, with companies from other countries, particularly in Asia, posing a significant challenge to U.S. companies. This competitive environment has led to increased pressure on pricing and a further need for innovation to maintain a competitive edge. The industry is increasingly affected by geopolitical tensions, particularly between the U.S. and China. The ongoing trade tensions between the US and China have created uncertainty and challenges for the semiconductor industry. These tensions have led to restrictions on trade and investment, which can disrupt supply chains and limit market access for US companies. However, they have also spurred efforts to diversify supply chains and increase domestic production, which could benefit the US semiconductor sector in the long run.
The U.S. government has recognized the strategic importance of the semiconductor industry and has taken steps to support its growth. The CHIPS and Science Act of 2022, which provides significant funding for domestic semiconductor manufacturing and research, is a prime example of this support.
The overall health of the global economy also plays a role in the performance of the semiconductor sector. Economic downturns can lead to decreased demand for electronic devices, which in turn reduces demand for semiconductors. Conversely, periods of economic growth can boost demand for semiconductors and create opportunities for US companies. With the election of President Donald Trump into the Oval Office, analysts are confident that the tech sector will continue to show improved performance.
Our Methodology
For this list, we identified the 10 semiconductor stocks which have the highest upside potential using 12-month consensus price target. Then we merged these stocks with Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 10 most popular hedge fund semiconductor stocks. The stocks are ranked in ascending order of their hedge fund positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician testing the latest 5G device, demonstrating the company’s commitment to innovation.
QUALCOMM Incorporated (NASDAQ:QCOM)
No. Of Hedge Fund Holders: 79
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells wireless technology. Its QCT segment provides chips for mobile, automotive, and IoT devices. QTL licenses its patent portfolio for wireless standards like 5G. QSI invests in early-stage tech companies across various sectors, including AI and automotive, and also serves US government agencies. Based in San Diego, Qualcomm was founded in 1985.
QUALCOMM Incorporated (NASDAQ:QCOM) reported revenue for Q1 2025 of $11.67 billion, 32% higher than guidance, and earnings before tax of $3.2 billion. The company’s cellular baseband processor market share for 2021 was $31.4 billion, highlighting the company as the market leader with a majority 55.7% share.
In recent news, U.S. President Donald Trump’s administration is working to strengthen restrictions on China’s chip industry, expanding on policies enacted under former U.S. President Joe Biden, as stated by Bloomberg. The Trump administration is keen on replicating the actions of the Biden Admin to curb exports to China, by pressuring companies in countries such as the Netherlands and Japan.
Earlier at the start of the year, QUALCOMM Incorporated (NASDAQ:QCOM) suffered a setback after its relationship with Apple fell through, with the tech giant opting to produce semiconductors in-house. Khaveen Jey & Anthony Goh with Khaveen Investments, estimate this contract would result in a midpoint of 17.5 million unit sales based on unit sales of iPhone SE4 and iPhone SE3. This means QCOM must diversify its revenue from Apple in order to sustain future growth. It must be noted that QUALCOMM Incorporated (NASDAQ:QCOM)’s biggest clients are Samsung, Huawei, & Xiaomi, thus off-setting the company’s production lines from Apple to these giants of telecom. QUALCOMM Incorporated (NASDAQ:QCOM) management reported robust growth in Android smartphone revenue, projecting a 20% year-over-year increase in fiscal 2024.CFO and COO Akash Palkhiwala stated:
On a sequential basis, the decline in QCT handset revenues is primarily driven by seasonality and shipments to Apple….we expect QCT handset revenues to grow by approximately 10% on a year-over-year basis, including the benefit of increased shipment for Samsung (OTCPK:SSNLF) Galaxy S25 smartphones.
On February 16, QUALCOMM Incorporated (NASDAQ:QCOM)’s share price traded higher, after Apple reaffirmed in-house production of their chip for use in the iPhone. The company’s price at the time of writing this article was $161.22, and a consensus average price of $199 for the next twelve trading months, with an upside of 23.43%.
Overall, QCOM ranks 10th on our list of top semiconductor stocks to buy now. While we acknowledge the potential for QCOM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that delivers higher returns than QCOM, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.