Market Analysis: T-Mobile vs Qualcomm for Investment Growth Investing Insights: T-Mobile vs Qualcomm

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By Ronald Tech

Two giants, T-Mobile TMUS and Qualcomm QCOM, have both surged to 52-week highs, tantalizing investors with promises of greater heights. While T-Mobile’s recent acquisition of U.S. Cellular’s wireless operations for $4.4 billion has spurred interest,

Qualcomm’s strides in AI technology have been equally alluring marked by a 48% increase in its value this year. Notably, Qualcomm’s stock has skyrocketed by an impressive 94% in the last year, with T-Mobile also showing a solid 24% increase. The burning question now remains- is it time to bet on T-Mobile or Qualcomm for soaring portfolios?

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T-Mobile’s Wireless Expansion

As the mobile sector battleground rages on, T-Mobile steps up its game, poised to acquire U.S. Cellular’s wireless operations. This strategic move will grant them access to millions of new customers along with a substantial store network addition. Notably, T-Mobile’s market cap already stands at an impressive $194.53 billion, securing its position as a major industry player.

Zacks Investment Research
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Zacks estimates forecast T-Mobile’s total sales to grow by 1% in fiscal 2024 and an additional 3% in FY25, reaching a staggering $82.51 billion. Moreover, the expected surge in annual earnings of 30% this year to $9.02 per share, compared to $6.93 in 2023, foretells a promising future. In FY25, EPS is projected to ascend by another 23% to reach $11.15 a share.

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Qualcomm’s AI Initiatives

In the realm of artificial intelligence, Qualcomm emerges as a pivotal player with groundbreaking advancements. Emphasizing power-efficient on-device AI, edge cloud AI, and 5G technologies, Qualcomm is driving the ubiquity of AI. The Qualcomm AI Hub, housing a diverse library of over 100 pre-optimized AI models spanning sectors like IoT, mobile, and computing, exemplifies their commitment to AI innovation.

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With the goal of democratizing AI, Qualcomm anticipates a 6% rise in total sales in FY24 and a promising 9% surge in FY25, reaching $41.85 billion. A remarkable 17% growth in annual earnings is expected in FY24, with a subsequent 10% increase projected for the following year, elevating EPS to $10.88 per share.

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Valuation & Dividend Comparison

T-Mobile and Qualcomm recently achieved fresh highs at $168 and $217 per share, respectively. Currently, T-Mobile’s stock is trading at an attractive 18.4X forward earnings, compared to Qualcomm’s 21.3X valuation, both below the S&P 500 P/E ratio of 22.2X.

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Highlighting their appeal, T-Mobile and Qualcomm offer annual dividend yields slightly over 1.5%, surpassing the S&P 500’s 1.27% mark.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Both T-Mobile and Qualcomm currently hold a Zacks Rank #3 (Hold), suggesting potential rewards for long-term investors. However, the remarkable surge in their stocks over the past year warrants caution, hinting at possible better buying opportunities on the horizon.

Where Will Stocks Go…

If Biden Wins? If Trump Wins?

The answers may surprise you.

Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!