Intel vs. Qualcomm: Which Chipmaker is Better Poised for Mobile & 5G?
Qualcomm's offering includes high-performance, low-power chip designs for mobile devices, PCs, XR (Extended Reality), automotive, wearable, robotics, connectivity and AI use cases. The company boasts a comprehensive intellectual property portfolio comprising 3G, 4G, 5G and other technologies.
With the growing proliferation of AI in PCs, smartphones, automotive and IoT applications, both Intel and Qualcomm are steadily advancing their semiconductor portfolios to bolster their competitive edge. Let us analyze the competitive strengths and weaknesses of the companies to understand who is better positioned to capitalize on emerging market trends.
The Case for Intel
Intel has been investing in expanding its manufacturing capacity to accelerate its IDM 2.0 (Integrated Device Manufacturing) strategy. Interim management is committed to keeping the core strategy unchanged despite efforts to drive operational efficiency and agility. The company is emphasizing the diligent execution of operational goals to establish itself as a leading foundry. It is focusing on simplifying parts of its portfolio to unlock efficiencies and create value.
Intel's innovative AI solutions are set to benefit the broader semiconductor ecosystem by driving down costs, improving performance and fostering an open, scalable AI environment. The company has witnessed healthy traction in AI PCs, which have taken the market by storm and remain firmly on track to ship more than 100 million by the end of 2025. Intel Xeon platforms have reportedly set the benchmark in 5G cloud-native core with substantial performance and power efficiency improvements, additional power-saving capabilities and easy-to-deploy software. This has triggered healthy demand trends from major telecom equipment manufacturers and independent software vendors to optimize and unleash proven power savings for a more sustainable future.
However, Intel derives a significant part of its revenues from China. As Washington tightens restrictions on high-tech exports to China, Beijing has intensified its push for self-sufficiency in critical industries. This shift poses a dual challenge for Intel, as it faces potential market restrictions and increased competition from domestic chipmakers. The company is also lagging behind in the GPU and AI front compared to peers such as NVIDIA Corporation NVDA and AMD. Leading technology companies are reportedly piling up NVIDIA's GPUs to build clusters of computers for their AI work, leading to exponential revenue growth.
The Case for Qualcomm
Qualcomm is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. Qualcomm is witnessing healthy traction in EDGE networking, which helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The automotive telematics and connectivity platforms, digital cockpit and C-V2X solutions are also fueling emerging automotive industry trends such as the growth of connected vehicles, the transformation of the in-car experience and vehicle electrification.
The company is strengthening its foothold in the mobile chipsets market with innovative product launches. It had extended its Snapdragon G Series portfolio with the addition of next-generation gaming chipsets, Snapdragon G3 Gen 3, Snapdragon G2 Gen 2 and Snapdragon G1 Gen 2 chips. Samsung, one of the major smartphone manufacturers, has deployed the Snapdragon 8 Elite Mobile Platform for its premium S25, S25 Plus and S25 Ultra devices. It is also placing a strong emphasis on developing advanced chipsets for the emerging AI PC market. The company has inked agreements to acquire MovianAI to augment its efforts in fundamental AI research.
Despite efforts to ramp up its AI initiatives, Qualcomm has been facing tough competition from Intel in the AI PC market. Shift in the share among OEMs at the premium tier has reduced Qualcomm's near-term opportunity to sell integrated chipsets from the Snapdragon platform. The company is also facing stiff competition from Samsung's Exynos processors in the premium smartphone market, while MediaTek is gaining market share in the mid-range and budget smartphone market. Competition is also likely to come from rivals like Broadcom Inc. AVGO and NVIDIA. Qualcomm's extensive operations in China are further likely to be significantly affected by the U.S.-China trade hostilities.
How Do Zacks Estimates Compare for INTC & QCOM?
The Zacks Consensus Estimate for Intel's 2025 sales implies a year-over-year decline of 4.3%, while that of EPS indicates growth of 315.4%. The EPS estimates have been trending southward on average over the past 60 days.
The Zacks Consensus Estimate for Qualcomm's fiscal 2025 sales suggests year-over-year growth of 11.8%, while that for EPS implies a rise of 14.6%. The EPS estimates have been trending southward over the past 60 days.
Price Performance & Valuation of INTC & QCOM
Over the past year, Intel has declined 32% against the industry 's growth of 23.9%. Qualcomm has lost 24.4% over the same period.
Intel looks more attractive than Qualcomm from a valuation standpoint. Going by the price/sales ratio, Intel's shares currently trade at 1.97 forward sales, significantly lower than 3.93 for Qualcomm.
INTC or QCOM: Which is a Better Pick?
Intel carries a Zacks Rank #4 (Sell), while Qualcomm carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Both companies expect their earnings to improve in 2025. Long-term earnings growth expectations for QCOM and INTC are 10.5% and 8.2%, respectively. Qualcomm is a bit expensive in terms of valuation metrics. However, Intel expects a decline in revenues contrary to that of Qualcomm. With a VGM Score of B and a better Zacks Rank, Qualcomm seems to be a better investment option at the moment.
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