Has QUALCOMM, Inc. (QCOM) Become the Perfect Stock?

Qualcomm made the right call when it focused on high-end mobile chips, as it has a huge 48% revenue share of smartphone applications processors with a particular focus on popular high-end products. By contrast, PC processor giant Intel Corporation (NASDAQ:INTC) has only 0.2% share in the smartphone processor market, showing just how badly Intel has missed the boat on mobile. As a result, Qualcomm has passed Intel in terms of market capitalization, and its huge growth rates have helped it beat out Texas Instruments Incorporated (NASDAQ:TXN) to become the No. 3 overall chip manufacturer. As more countries around the world shift to faster data networks, Qualcomm stands to benefit even more from this trend, both through greater processor sales and from licensing of the company’s patents.

Recently, the big point of contention for Qualcomm has been whether it will get its processor chips into more smartphones and tablets. Qualcomm has been able to keep most of the smartphone market, but rival NVIDIA Corporation (NASDAQ:NVDA) has been successful in getting its Tegra line of chips into such popular tablets as the Nexus 7 and Surface RT. But recent reports suggest that the new Nexus 7 line may use a processor from Qualcomm’s Snapdragon line rather than a Tegra chip, threatening NVIDIA’s place in the tablet.

For Qualcomm to improve, it needs to use the move toward 4G networks to build up even bigger profits and start returning more of those earnings back to investors through dividends. If it keeps growing the way it has, though, Qualcomm could easily reach perfection by this time next year.

The article Has Qualcomm Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Intel and NVIDIA. The Motley Fool owns shares of Intel and Qualcomm.

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