Daniel Berenbaum, an analyst at MKM Partners LLC, said Qualcomm Inc. is his “single best buy” as the largest seller of mobile-phone semiconductors benefits from price increases and surging demand for Web-enabled handsets.
“Qualcomm basically rings the cash register anytime anybody buys an advanced smartphone,” said Berenbaum in a radio interview with Tom Keene and Joe Brusuelas on “Bloomberg Surveillance” in New York today.
Qualcomm, based in San Diego, gained a bigger market value than Intel Corp. for the first time last week after it forecast results that topped analysts’ estimates, adding to evidence that smartphones are gaining ground at the expense of computers. Under Chief Executive Officer Paul Jacobs, Qualcomm is gaining as consumers in developed nations snap up pricey new phones while those in emerging markets upgrade to devices that provide Web access. Intel, a laggard in the market for mobile-phone chips, is being hurt by slack personal-computer sales.
Qualcomm’s current market capitalization of $105.2 billion tops Intel’s $99.3 billion. Qualcomm makes most of its revenue from baseband chips that connect phones to cellular networks.
Even as Apple Inc., one of Qualcomm’s biggest customers, enters a bear market, the chipmaker can gain from growth prospects of other clients, including smartphone makers HTC Corp. and Samsung Electronics Co., Berenbaum said.
“Qualcomm can continue to benefit even if Apple is perceived not to,” Berenbaum said. “We’re going to these advanced networks. Qualcomm is able to extract a higher price, not just for its chips, but it’s seeing a better mix outside of Apple.”