Best Technology Stock to Buy: NVIDIA or Qualcomm?

  If you're in the game to invest in the chip industry, the companies you need to think about should most likely be Qualcomm (NASDAQ: QCOM) and NVIDIA Corporation (NASDAQ: NVDA), the strongest players in the market.

• Qualcomm has a long history in cellular chip space.
• NVIDIA is a leader in the graphics processing unit (GPU) market.

Both tech companies are positioning themselves to take advantage of long-term chip trends, but we need to take a closer look at what each one of them is doing to grow their current business in order to find out which is the better purchase right now. This is exactly the content of the article.

Qualcomm

The royalties of 3G and 4G patents that Qualcomm had collected from many device manufacturers for many years was the company's general revenue source. The company solved most of the problems after continued struggles with other tech companies over how much it gets for patent-based royalties. The company's chip business is still alive and well. Sales to device manufacturers such as Apple, Samsung and Xiaomi account for about three-quarters of the company's total revenue.

The rest of the company's sales come from the licensing business.

Qualcomm relies on 5G smartphones, the next wave of cellular devices, as a potential catalyst for its work. While it may take several years for 5G to disappear completely from the market, Qualcomm already has 110 total 5G deals with all major smartphone manufacturers for a 5G license. Qualcomm is pretty optimistic that 5G could boost its current business, as it predicts the number of 5G-enabled smartphones will increase by 150 percent this year.

NVIDIA 

NVIDIA's core business is designing graphics processors for gaming and data centers. The company's GPUs do a great job of fast processing of images and graphics, which puts them in an excellent position for gaming and AI processing. At a time when tech companies increasingly needed to use GPUs to assist other processors, NVIDIA's data center sales increased by a staggering 162 percent in the last quarter (reported on November 18).

GPU sales of NVIDIA's in gaming market also continues to grow.

Revenue for the company's gaming segment increased 37 percent in the last quarter, representing 48 percent of the company's total sales. Long-term opportunities for NVIDIA, the use of its chips by other technology companies and competitors (Advanced Micro Devices: AMD) is a significant phenomenon, further cementing its strong position in the current market. NVIDIA is not only a GPU leader, but its chips are taking advantage of long-term growth trends in gaming, AI cloud computing, and 5G data centers. The global GPU market was worth an average of $ 19.8 billion in 2019, but by 2027 the volume is projected to increase to $ 200 billion. Considering NVIDIA's entry into existing strategic markets and leading its competitors in the GPU space, the company is well placed to continue to grow.   Best Technology Stock to Buy: NVIDIA or Qualcomm? Source: https://www.fool.com/ You may also be interested in this:

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