Broadcom Corporation (BRCM) vs. QUALCOMM, Inc. (QCOM): Which One of These Semiconductor Stocks Is Worth Buying?

Qualcomm leads the baseband and application processors market

QUALCOMM, Inc. (NASDAQ:QCOM) is the leading player in the cellular baseband market with more than 40% market share. QUALCOMM, Inc. (NASDAQ:QCOM) also leads the mobile application processors market with roughly 50% market share in terms of revenue.

QUALCOMM, Inc. (NASDAQ:QCOM) announced Snapdragon 200 and 400 processors aimed at mid-tier and entry-level smartphones. Expected in handsets later this year, the Snapdragon 200 and 400 will balance the high-end 600 and 800 processors introduced in January.

QUALCOMM, Inc. (NASDAQ:QCOM) faces fierce competition from rival NVIDIA Corporation (NASDAQ: NVDA). Many of Qualcomm’s Snapdragon chips integrate LTE into a single chip. By contrast, NVIDIA’s newly announced Tegra 4 uses a separate, standalone LTE chipset, the fifth-generation NVIDIA Icera i500 processor.

NVIDIA’s newly announced Tegra 4i chip will also integrate the Icera i500 modem on-die. It will support 8 primary bands and both 2×2 MIMO and 4×4 MIMO transmission modes on LTE. NVIDIA says the chip will be available in 2014.

Broadcom vs. Qualcomm: The verdict

BRCM Price / Book Value data by YCharts

Broadcom has a market cap of $17.31 billion with a PE multiple of 26.8, while Qualcomm’s market cap is $113.35 billion with a PE multiple of 17.4. Although Broadcom appears to be richly valued in terms of the PE multiple, the company is attractively valued than QUALCOMM, Inc. (NASDAQ:QCOM) in terms of both Price to Book and Price to Sales ratios.

With Broadcom operating in the high growth segment of the wireless semiconductor market, I feel Broadcom is a better investment opportunity than Qualcomm at the current price.

Anindya Batabyal has no position in any stocks mentioned. The Motley Fool recommends NVIDIA. The Motley Fool owns shares of Qualcomm.