Why I invested in Qualcomm stocks and my vision for the future
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I firmly believe that Qualcomm is a company that offers a great investment opportunity at the moment. In this article, I explain what makes Qualcomm unique, why I think it is a safe investment, and mention the most important circumstances in the case of Qualcomm that every investor should know before buying shares. And above all, I am sharing my vision for the future of the market in which Qualcomm is or will be moving.
This is the first article of its kind on my blog. I am concentrating more and more on valuing money (instead of saving a hundred crowns on tickets). If you are interested in the article, please let me know using the contact form at the end of the article. It will be a signal to me that there is an interest in presenting my own opinions and experiences from investing in stocks (but also investing in P2P loans, social trading, HYIP, bitcoin , etc.).
Why invest in Qualcomm
1) We hear about Intel, but Qualcomm is at the helm
As we move into the technology sector, we hear that Intel is “sure.” Yes, I think Intel is a good and stable investment (current stock value $ 31.20).
My vision for the future for Intel: for an investment where the value of the stock does not exceed $ 32, I consider it a timely purchase.
Below is a chart of Intel stock movements (INTC ticket).
But Qualcomm shares are a different level. Rather than answering the question of whether investing in Intel or Qualcomm is better, I will outline the main differences and factors that lead me to Qualcomm.
I consider having Intel shares in my portfolio to be a good step. As a safe step if we invest dividend shares within the investment strategy. Intel offers a good dividend on its area (technology). It proves in the long run that it is a stable growing company. But how will Intel respond to changing technologies?
Although both Intel and Qualcomm make chips, they occupy a different area of the market. While Intel supplies chips for computers, Qualcomm supplies chips for mobile phones.
The long-term trend shows that the PC market is going down rapidly . On the contrary, the market for mobile phones and smartphones is in an incredible boom (it has already passed in the USA and Europe, now mainly China and India).
A clear plus for Qualcomm.
I don’t think Intel is a dinosaur and won’t respond to a changing environment. Already today, it invests considerable amounts in IoT, the so-called Internet of Things (communication of things via the Internet, such as a car with a garage door, home lighting with heating in the apartment, etc.). This is a young “fresh” emerging market in which there will be a fierce struggle between technology companies.
When it comes to investing in Intel, perhaps the biggest scarecrow is Nokia’s exemplary “failure” – it has not adapted to new trends and has suffered a very rough landing. See the Nokia stock chart below.
From $ 60 a share to $ 6! In 2008 it was still worth 40 USD and then it only went downhill. Nokia’s CEO said in 2015: We didn’t do anything wrong and still lost (unfortunately, the original LinkedIn article was removed ) . This is not entirely true because they have violated the basic recipe for success – the ability to constantly adapt and react flexibly. Oh, you technology!
In my opinion, Intel is underestimated today in terms of current trends and events. This is also confirmed by its P / E value, which is below 10 (explained below). Nevertheless, there is still some risk that the mammoth Intel will be able to adapt to future trends.
I am a supporter of Qualcomm because it has taken a leading position in the market for the production of chips for mobile phones. This is a very lucrative global market facing a wave of sales in developing countries.
But it’s not just about mobile phones, the main thing is data transfer and “connection”. That makes Qualcomm literally armored. This data transfer is far beyond the level of “Apple and Samsung sales” or telephone operators – we are talking about data transfer between satellites and Earth. I call it the infrastructure of planet Earth. Data connections affect our lives more than we often realize. Thanks to satellites, we are harvesting grain today, planning highway construction, flying by plane, operating secret services, catching criminals, watching the weather forecast, watching YouTube or buying new shoes on the e-shop.
Qualcomm focuses on innovation and produces super quality products. He is one of the leading innovators in the field of IoT (Internet of Things) and I also trust him more in this sector than Intel.
Investing in Qualcomm shares is predatory. In an informal meeting with friends, I would say that the investment in Intel is stable, it will simply hold, but the investment in Qualcomm will go up.
Just because you haven’t heard of Qualcomm, for example, doesn’t mean he’s a beginner. He has been operating on the market since 1985. His ingenuity and innovation have accelerated the advent of smartphones. Thanks to its innovations in the field of chipsets for 3G and 4G, it has enabled faster data transfer in mobile and satellite networks. I write more about the company at the end of the article.
I believe that innovation is what moves companies forward and provides it with sufficient flexibility to adapt and increases its responsiveness to a changing environment. And in the technology sector, those changes are damn fast.
2) Qualcomm has been increasing the dividend for 12 consecutive years
Over the last 12 years, Qualcomm has been increasing its dividend, with an average increase of 22%. Qualcomm shares are thus in sharp search, especially for investors who focus on dividend shares, so-called investing in dividend shares.
For comparison, Intel shares have been frozen x times at the same value, even for several consecutive quarters.
Current values of dividends and shares of Qualcomm and Intel:
- Qualcomm dividend: 3.69% ($ 51 shares)
- Intel Dividend: 3.31% ($ 31 Shares)
The company’s historical policy does not guarantee the same future decisions. Nevertheless, I think that Qualcomm shares offer more lucrative dividends in the future.
3) Qualcomm does business very smartly when it sells licenses
I see Qualcomm’s incredible potential in license sales. We see this in other technology companies (Google is a prime example of all of them) that literally patent everything they do.
Did you know that Twitter patented “tweet”? 🙂
Qualcomm has great capacity to inject capital into innovation. He then licenses subsequent patents to other companies that use his ideas, know-how and technology. This is an incredible strategy!
Qualcomm doesn’t just supply some products to other companies. He passes on the know-how and the others pay him for it! This is a powerful weapon.
On the other hand, I would also like to mention the negative reactions to Qualcomm’s sales policy and its increasingly frequent litigation. Antitrust authorities in various countries (including the European Commission) are increasingly investigating him for unfair competition and have already received several million / trillion fines. Of course, these are not financial amounts of fines, but a future reputation and symbiosis or competition with suppliers and customers. I write more about legal disputes and fines below.
