Reviewing ARM (NASDAQ:ARM) & Qualcomm (NASDAQ:QCOM)

Qualcomm (NASDAQ:QCOM) and ARM (NASDAQ:ARM) are both large-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Risk and Volatility

Qualcomm has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500. Comparatively, ARM has a beta of 3.93, suggesting that its share price is 293% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Qualcomm and ARM, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Qualcomm	3	21	13	3	2.40
ARM	1	7	18	0	2.65

Qualcomm presently has a consensus price target of $197.13, indicating a potential upside of 11.34%. ARM has a consensus price target of $296.38, indicating a potential upside of 47.88%. Given ARM’s stronger consensus rating and higher possible upside, analysts clearly believe ARM is more favorable than Qualcomm.

Insider & Institutional Ownership

74.3% of Qualcomm shares are held by institutional investors. Comparatively, 7.5% of ARM shares are held by institutional investors. 0.1% of Qualcomm shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Qualcomm and ARM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Qualcomm	31.60%	30.62%	14.53%
ARM	17.13%	11.57%	8.99%

Earnings and Valuation

This table compares Qualcomm and ARM”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qualcomm	$43.12 billion	4.39	$13.63 billion	$12.70	13.94
ARM	$5.46 billion	39.18	$904.00 million	$0.87	230.37

Qualcomm has higher revenue and earnings than ARM. Qualcomm is trading at a lower price-to-earnings ratio than ARM, indicating that it is currently the more affordable of the two stocks.

Summary

Qualcomm beats ARM on 9 of the 15 factors compared between the two stocks.

About Qualcomm

Qualcomm Incorporated is a technology company that develops wireless communications technologies and semiconductor products. Its chips and related systems are used in smartphones and other connected devices, with products spanning mobile processors, modem-radio frequency systems, and connectivity solutions. The Snapdragon brand includes platforms for mobile devices as well as computing, automotive, and extended-reality applications. Qualcomm also develops technology for automotive systems and the Internet of Things, including connectivity and processing solutions for vehicles, industrial equipment, and consumer devices.

About ARM

Arm Holdings plc designs and licenses semiconductor technology, including processor architectures and related intellectual property. Rather than manufacturing chips, the company licenses its designs and collects royalties on products that use them. Arm’s offerings include Cortex CPUs, Mali graphics processors, Neoverse infrastructure platforms and other technology for applications ranging from smartphones and consumer electronics to automotive systems, the Internet of Things and cloud computing.