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Qualcomm vs. Applied Materials: Which Semiconductor Stock is a Better Buy?

imageStock Markets20 minutes ago (Jul 06, 2021 04:30PM ET)

(C) Reuters. Qualcomm vs. Applied Materials: Which Semiconductor Stock is a Better Buy?

Because rising demand from several industries amid a global supply shortage has been driving price hikes for semiconductors, major players in this space–Applied Materials (NASDAQ:AMAT) and Qualcomm (QCOM)–should benefit significantly in the near to midterm. But which of these two stocks is a better buy now? Let’s find out.Applied Materials, Inc. (AMAT) and QUALCOMM Incorporated (NASDAQ:QCOM) are two established companies in the semiconductor industry. AMAT provides the materials and engineering solutions used to produce new chips and advanced displays. It operates through the following segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. QCOM develops and commercializes wireless industry technologies. It is organized into three segments: Qualcomm CDMA Technologies, Qualcomm Technology Licensing, and Qualcomm Strategic Initiatives.

An exponential increase in demand and limited supply are pushing semiconductor prices up. The demand is increasing primarily from the electronics and automotive industries, given the increased focus on these two industries thanks to the COVID-19 pandemic and global climate change. These factors, combined with huge government and private investments to increase the supply of semiconductors, should drive the industry’s growth.

Investors’ growing interest in this space is evident in iShares PHLX Semiconductor ETF’s (SOXX) 66.4% returns over the past year. And, according to Fortune Business Insights, the global semiconductor market is expected to grow at an 8.6% CAGR between 2021 – 2028. So, both AMAT and QCOM are expected to benefit significantly in the coming months.

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Qualcomm vs. Applied Materials: Which Semiconductor Stock is a Better Buy?

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