Qualcomm (QCOM-Q)

Plays nicely into Edge AI. Out of favour, surprising. Still a major supplier into the smartphone market. Follows it, but is waiting for a catalyst.

Trades at 12.5x PE, trades at a 41% discount to semi sector, and they've done a good job moving into EVs.

He bought more. 14x forward PE and pays a 2.3% dividend yield. Good value. The ARM lawsuit was an overhang, but now resolved in QCOM's favour. This and the semis saw momentum in the first half of 2024. Business fundamentals remain intact; only QCOM can serve certain AI applications. Likes it for the long run.

One of the major chip maker names to consider for your portfolio. Adds value to the supply chain.

It reports Wednesday. Good risk/reward with shares rallying after an earnings beat but not declining much after a miss. They may buy Intel, which is rallying these days.

Has a low PE compared to fellow chipmakers. They recently suffered from over-inventory, but have mostly worked through this. What's interesting in QCOM is their chips used in cars and the internet of things, so they have good growth potential.

Makes sense for QCOM to be interested in INTC, as it's a path to being more vertically integrated. Could create more synergies than other players. But you can't buy a stock hoping for a takeout; it may not occur.

He talked about the bid for Intel. Intel doesn't have any AI of any significance, is a low growth business, and missed the mobile window. It should be dilutive to earnings from a growth perspective

He likes them without them buying Intel. It is one of the cheapest players in the chip space from a multiples perspective. For example Apple's P/E is near 40 but Qualcomm's is 25. They are working on new semi-conductor technology. He thinks it will re-visit its highs relatively soon, and considers it more of a trade than an investment.          Buy 29  Hold 14  Sell 1

A play in the semiconductor space, if you really want to take some risk.

He sold some when it got above $200, then bought back below $150. It's 2% of his portfolio; when it gets to 2.5%, he brings it back to 2%. If it goes below 2%, he brings it back up. Likes it long term. 

The negative is repeated fights with AAPL; if the relationship ends, looking at $20 downside. Sexy side is AI on a chip; if that comes through, probably $70-80 upside.

It has been the beneficiary of the AI boom and he is not active in that space which is cyclical with high multiples. Also the big techs ate starting to produce their own chips.