NVIDIA (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM) are two of the biggest names in the chipmaking world. While both have underperformed recently, there’s a growing sense that momentum could be about to shift.
Each stock has shown signs of stabilizing after steep declines, and with earnings, valuations, and technicals now converging into what could be strong Q2 setups, the question is: which one deserves your capital? Let’s take a closer look.
NVIDIA: Record Revenue, But Valuation Remains a Sticking Point
NVIDIA shares were trading at $109 during Wednesday’s session, still down nearly 30% from January’s all-time high. But there’s a sense that the worst of the pullback may be behind them. The stock looks to be forming a double bottom, a technical pattern that often signals a bullish reversal. In short, the bears may have tried and failed to push shares to new lows, which suggests buyers are slowly taking back control.
That sentiment would make sense, considering NVIDIA’s latest earnings report at the end of February. The company blew past analyst expectations, posting all-time record revenue and year-over-year growth of nearly 80%. Just as importantly, forward guidance came in ahead of expectations, supporting the idea that demand for AI chips and data center hardware remains robust.
Despite all this, shares have struggled to mount a sustained recovery, but analysts have remained firmly bullish. William Blair and Cantor Fitzgerald both reiterated their Buy ratings in recent weeks, with Cantor’s price target of $220 pointing to a 100% upside from Wednesday’s levels.
That’s a huge potential gain for a company of NVIDIA’s size, but it comes at a cost. The stock currently trades with a price-to-earnings ratio of 38, far higher than many of its peers. For investors who want exposure to the chip sector without paying top dollar, that’s a serious consideration.
Qualcomm: Undervalued and Steady, But Flying Under the Radar
While NVIDIA has been dominating headlines, Qualcomm has been quietly building a bullish case of its own. Shares are still down more than 30% from their high last June, having never failed to recover from the summer slump. Like NVIDIA, however, they’ve also shown resilience over the past few weeks and are holding firm along a multi-year support line at the $150 level. That kind of technical base can often act as a springboard for stronger moves higher.
Qualcomm’s last earnings report, released two months ago, beat expectations and was followed by a dividend increase - one of the strongest signals a company can send about its confidence in future growth. Yet, unlike NVIDIA, Qualcomm hasn’t seen a wave of recent analyst upgrades. The last major update came in February when Benchmark reiterated its Buy rating with a $240 price target. That still implies a 55% upside from current levels, but the lack of fresh coverage is noticeable.
Still, there’s a valuation argument that can’t be ignored. With a PE ratio of just 16, Qualcomm looks incredibly cheap compared to its peers. NVIDIA, at 38, and Advanced Micro Devices (NASDAQ:AMD), currently trading at a staggering 114, make Qualcomm look like a bargain in comparison. For value investors or those more risk-averse, this alone may be reason enough to lean toward Qualcomm.
Which Stock to Buy for Q2: NVIDIA or Qualcomm?
There’s a strong case to be made for both NVIDIA and Qualcomm heading into Q2. NVIDIA has the momentum, the growth story, and the analyst attention, but it comes with a richer valuation. Qualcomm offers a more grounded opportunity with strong fundamentals, a better valuation, and an improved technical setup.
For aggressive growth investors, NVIDIA may still be the pick, especially if it can hold $105 and reclaim $120 in the weeks ahead. But for those looking for value, steadier upside, and less downside risk, Qualcomm may be the better bet. Either way, both stocks look primed for a stronger Q2 than what they’ve shown so far this year.