Broadcom Corporation (NASDAQ:BRCM) reported year-over-year gains across all of its segments. Analysts were expecting much more from Broadcom Corporation (NASDAQ:BRCM) than what it had reported, however. Year-over-year, the company generated a 2% decline in earnings per share. The primary reason for this under-performance is falling demand for its product portfolio.
Source: Ycharts
Broadcom Corporation (NASDAQ:BRCM)’s performance peaked back in 2010. Following 2010, the company’s growth could not be sustained. The growth in the wireless networking business for homes peaked as consumer preference switched from PCs to tablets.
I find it highly doubtful that Broadcom Corporation (NASDAQ:BRCM) can justify its 38.8 price-to-earnings multiple. Analysts project that the company will report a 5.8% year-over-year decline in earnings for the fiscal year.
QUALCOMM remains dominant
QUALCOMM, Inc. (NASDAQ:QCOM) dominates in both tablets and mobile. Qualcomm holds 57% of the baseband market. Qualcomm’s recent release of the Snapdragon 800 is helping to keep competitors like Intel Corporation (NASDAQ:INTC) at bay. 
Source: ArsTechnica
Qualcomm’s design wins in 4G technologies gives it a large moat, and let’s not forget that Qualcomm’s economies of scale are enough to keep Intel Corporation (NASDAQ:INTC) at bay. So what could competitors like Broadcom do to stay in the race against Qualcomm? Absolutely nothing.
Qualcomm projects that its revenues will grow by 19% to 23% for the full year. Meanwhile, both Intel and Broadcom had to lower full-year guidance in the second quarter. The momentum in mobile is strong. Unfortunately, both Intel and Broadcom have failed to generate critical mass in the mobile market.
Qualcomm reported earnings per share of $1.03 in the second quarter. The company was able to meet analyst expectation, which were set at $1.03 for the quarter. This should not come as any surprise to investors as Qualcomm provides some of the most accurate guidance figures among technology companies.
Conclusion
Broadcom will face difficulties with growing revenues as Qualcomm has too firm of a grip on mobile. I believe that Intel will continue to face difficulties in the server market. The faster the Intel processor, the lower the profit. I think Qualcomm holds the most promise out of the three semiconductor companies.
Microsoft has been having difficulties with generating revenue growth due to short-term difficulties across Windows 8 and Microsoft Office. I think that Microsoft Office will generate revenue growth once it transitions over to Office 365. This process could take many quarters, which will require investors to have a buy-and-hold mentality.
The article Technology Titans Suffered a Blow this Past Quarter originally appeared on Fool.com and is written by Alexander Cho.
Alexander Cho has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, Microsoft, and Qualcomm. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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