Longtime chipset leaders Qualcomm (NASDAQ:QCOM) and NVIDIA (NASDAQ:NVDA). have experienced decidedly different 2017s so far. Qualcomm stock has lost 18% year-to-date, while NVIDIA has soared 58%, even after the recent head-shaking sell-off that followed its Aug. 10 earnings report.

Considering recent performance, NVIDIA would seem to be the better buy, hands down. But it could be argued that Qualcomm's legal troubles -- it's battling with both government agencies in multiple nations, and longtime smartphone customer Apple -- have made it a screaming value. One could make a case for either Qualcomm or NVIDIA as a long-term stock holding, but right now, one has the edge.

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The case for Qualcomm

As expected per Qualcomm's updated guidance, its spat with Apple hit its all-important licensing revenue hard. It had shaved $500 million off its fiscal third-quarter guidance ahead of its announcement, which may have braced Wall Street for the worst, explaining why its stock is down just 5.6% since it shared the ugly truth.

Revenue sank a disappointing 11% to $5.4 billion  last quarter, which was right in line with Qualcomm's adjusted forecast. What really hurt cash flow were the $927 million fine it was forced to pay to South Korean regulatory authorities, and the $940 million payment it had to send to BlackBerry.

Toss in the negative impact on Qualcomm's licensing fees from its squabble with Apple, and operating income  sank 51% to $773 million. Licensing revenue declined 42% to $1.17 billion, which in turn resulted in a 51% drop in earnings before taxes (EBT) to $854 million.

So, what's to love about this stock? First of all, Qualcomm has been down this path before, having been compelled to pay China a $975 million fine  to settle antitrust accusations. The Chinese market has since become one of Qualcomm's key revenue drivers, and it wouldn't be surprising if South Korea eventually follows suit. Once Qualcomm gets its legal troubles under control, it will be an outstanding value stock for risk-tolerant investors.

The case for NVIDIA

Almost unbelievably, considering NVIDIA's recent record-breaking fiscal 2018 second quarter, its stock nosedived 9% the day after it shared its results. Investors have since come to their senses, but the initial negative reaction exemplifies the risk a stock like NVIDIA carries, due to its jaw-dropping performance and relatively high valuation.

That said, NVIDIA absolutely knocked its last quarter out of the park, posting  a stunning 56% jump in sales to $2.23 billion. Operating expenses rose  just 20% to $614 million, and with the help of improved margins, profits hit $0.92 a share, a 124% jump over last year's $0.41 a share.

When NVIDIA's name is mentioned, its industry-standard graphics processing units (GPUs) often come to mind. NVIDIA doesn't break out segment results, but it did note that in gaming, a key contributor to last quarter's success was that "we power the fastest growing platforms -- GeForce and Nintendo Switch." Virtually every one of NVIDIA's critical forays into smart cars, cloud data centers, and artificial intelligence (AI) initiatives also performed outstandingly.

On the heels of the previous quarter, when it nearly tripled data center revenue, NVIDIA almost matched that by growing sales in the unit more  than two and a half times. Partnerships with some of the biggest players on the planet for smart cities, autonomous vehicles, AI, and virtual reality (VR) gaming, have NVIDIA ideally positioned for continued growth.

And the better buy is...

In the long-run, Qualcomm will likely get its disputes settled and, as was the case after its difficulties in China, end up the better for it. But despite its stock's relative value and the recognition its legal troubles will eventually fade, NVIDIA appears to be further along in its quest to expand into burgeoning markets, which is why it gets the nod as the better buy today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.