This Mobile Giant Will Keep Analysts Guessing

They cannot look out far.
They cannot look in deep.
But when was that a bar
To any watch they keep?
-- "Neither Out Far Nor In Deep" by Robert Frost, 1936

In this tribute to National Poetry Month, my favorite poet laureate looked at people on a beach always watching the waters. But he might as well have written these words about Wall Street analysts, always eager to predict the future to totally unreasonable levels of precision.

Nowhere would Frost's observation be more appropriate than in the ever-changing market for mobile computing. Heading into Wednesday's second-quarter report, mobile-chip powerhouse Qualcomm (Nasdaq: QCOM  ) has been a moving target for analysts. Thirty-three firms have published earnings estimates for the quarter, landing at a consensus average of $0.89 per share. But that's only after two of our Wall Street heroes upped their targets in the past week alone, and eight boosted their targets since mid-March.

Of course, many of these adjustments were reactions to the new Apple (Nasdaq: AAPL  ) iPad, which is selling like hotcakes and sports several important Qualcomm chips inside. But it's not as if Qualcomm really needed another specific catalyst: The company dominates the market for certain types of mobile connectivity thanks to its ubiquitous Snapdragon chipset.

For example, HTC's new flagship phone was designed around the mighty NVIDIA (Nasdaq: NVDA  ) Tegra 3 processor, but the AT&T (NYSE: T  ) version will swap the Tegra for a Snapdragon to keep up with Ma Bell's 4G LTE network standards.

That's just one example of Qualcomm's long, insidious fingers. Samsung even replaced a processor designed by Sammy itself with a Snapdragon to comply with T-Mobile USA's high-speed network. If that's not a vote of confidence in Qualcomm's products, I don't know what is.

So analysts keep ratcheting up their estimates for Qualcomm, yet they tend to fall short of the real results. Qualcomm has beaten earnings targets in each of the past four quarters and will probably do it again this week. It's hard to come up with a better horse to play in the trillion-dollar arms race of mobile computing than Qualcomm. Learn more about the mobile revolution in this special report, but grab your copy right away, because it won't be free forever.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Qualcomm and Apple and has stock in Apple. Motley Fool newsletter services have recommended buying shares of Apple and NVIDIA, writing puts on NVIDIA, and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1863120, ~/Articles/ArticleHandler.aspx, 10/28/2016 5:06:29 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
QCOM $70.09 Up +1.89 +2.77%
Qualcomm CAPS Rating: ****
AAPL $114.48 Down -1.11 -0.96%
Apple CAPS Rating: ****
NVDA $70.68 Down -1.48 -2.05%
Nvidia CAPS Rating: ****
T $36.52 Up +0.09 +0.25%
AT and T CAPS Rating: ****