In the dynamic world of semiconductors, two prominent players stand out: QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON). Both companies operate within the same industry, but they differentiate themselves through unique innovation strategies and market focus. QUALCOMM is renowned for its foundational technologies in wireless communications, while ON Semiconductor excels in intelligent power solutions for electrification. As we delve into their strengths and market positions, I aim to help you determine which company presents the more compelling investment opportunity.
Table of contents
Company Overview
QUALCOMM Incorporated Overview
QUALCOMM Incorporated is a leading technology company headquartered in San Diego, California, primarily engaged in the development and commercialization of foundational technologies for the wireless industry. With a market cap of approximately $175B, QUALCOMM operates through three main segments: Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). The QCT segment focuses on supplying integrated circuits and software for wireless communications, while QTL grants licenses for its extensive patent portfolio, specifically related to 3G/4G/5G technologies. The QSI segment invests in early-stage companies across various sectors, including AI and IoT. Led by CEO Cristiano Amon, QUALCOMM aims to drive innovation in next-generation wireless communications.
ON Semiconductor Corporation Overview
ON Semiconductor Corporation, headquartered in Scottsdale, Arizona, specializes in intelligent sensing and power solutions, catering to a diverse array of industries including automotive and industrial applications. With a market cap of approximately $19B, ON Semiconductor provides a wide range of semiconductor products through its three segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The company emphasizes electrification and sustainability, supporting advancements in electric vehicles and renewable energy. Under the leadership of CEO Hassane S. El-Khoury, ON Semiconductor is positioned as a key player in the semiconductor industry, focused on delivering efficient and innovative solutions.
Key Similarities and Differences
Both QUALCOMM and ON Semiconductor operate within the semiconductor industry and are committed to technological advancement. However, their business models differ significantly; QUALCOMM emphasizes wireless communication technologies and licensing, while ON Semiconductor focuses on intelligent power solutions for electrification and sustainability. This distinction highlights the broader applications of each company’s products across various markets.
Income Statement Comparison
The table below presents a side-by-side comparison of the recent income statements for QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON), highlighting key financial metrics.
| Metric | QCOM | ON |
|---|---|---|
| Revenue | 44.28B | 7.08B |
| EBITDA | 14.93B | 2.54B |
| EBIT | 13.33B | 1.90B |
| Net Income | 5.54B | 1.57B |
| EPS | 5.06 | 3.68 |
Interpretation of Income Statement
In the most recent fiscal year, QUALCOMM’s revenue increased significantly to 44.28B, up from 38.96B in the previous year, while ON’s revenue decreased slightly from 8.25B to 7.08B. Despite the revenue dip, ON managed to maintain a stable net income of 1.57B, indicating effective cost management. Qualcomm’s net income also decreased to 5.54B from 10.14B, reflecting an erosion of margins amidst rising costs. Overall, Qualcomm’s growth trajectory appears to be slowing, while ON’s performance, despite a slight revenue decline, shows resilience in profitability.
Financial Ratios Comparison
In this section, I present a comparison of key financial metrics between QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON) to help you evaluate their performance.
| Metric | QCOM | ON |
|---|---|---|
| ROE | 26.13% | 17.88% |
| ROIC | 13.19% | 11.88% |
| P/E | 32.70 | 17.13 |
| P/B | 8.54 | 3.06 |
| Current Ratio | 2.82 | 5.06 |
| Quick Ratio | 2.10 | 3.38 |
| D/E | 0.70 | 0.38 |
| Debt-to-Assets | 29.54% | 23.90% |
| Interest Coverage | 18.61 | 28.37 |
| Asset Turnover | 0.88 | 0.50 |
| Fixed Asset Turnover | 9.44 | 1.61 |
| Payout Ratio | 68.67% | 0% |
| Dividend Yield | 2.10% | 0% |
Interpretation of Financial Ratios
The analysis indicates that QCOM exhibits strong profitability with a higher ROE and ROIC compared to ON, though it carries more debt as shown by its higher D/E ratio. While QCOM has a significantly higher P/E and P/B ratio, indicating potentially overvalued stock, ON shows impressive liquidity with a very high current and quick ratio. However, ON’s lack of dividends may concern income-focused investors. Overall, both companies have strengths and weaknesses that warrant careful consideration based on your investment strategy.
Dividend and Shareholder Returns
QUALCOMM (QCOM) pays a dividend with a current yield of 2.1%. Its payout ratio of 36% suggests a sustainable distribution supported by strong free cash flow. Additionally, the company has a solid history of share buybacks, enhancing shareholder value.
In contrast, ON Semiconductor (ON) does not pay dividends, prioritizing reinvestment into growth and innovation. This strategy aligns with a high-growth phase, yet the lack of returns may concern some investors. Both companies, however, engage in share buybacks, indicating a commitment to returning value to shareholders. Overall, QCOM’s approach appears more conducive to sustainable long-term value creation.
Strategic Positioning
QUALCOMM (QCOM) holds a significant market share in the semiconductor industry, particularly in wireless communications technologies, with a strong focus on 5G applications. The company faces competitive pressure from ON Semiconductor (ON), which specializes in intelligent power solutions for automotive and industrial markets. Both companies are susceptible to technological disruptions, such as advancements in AI and electric vehicle technologies, which could reshape market dynamics. Their ability to innovate and adapt will be critical to maintaining their market positions.
Stock Comparison
Over the past year, we have observed significant price movements and trading dynamics for QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON), reflecting divergent trends in their performance.
Trend Analysis
QUALCOMM Incorporated (QCOM) has shown a price change of +12.91% over the past year, indicating a bullish trend. The stock has experienced notable acceleration, with a highest price of 215.33 and a lowest price of 127.46. Recent performance from September 7, 2025, to November 23, 2025, reflects a continued upward movement with a price change of +2.16% and a standard deviation of 6.8, suggesting moderate volatility.
ON Semiconductor Corporation (ON), on the other hand, has experienced a significant decline of -44.09% over the same period, characterizing a bearish trend. The trend shows acceleration with a highest price of 83.53 and a lowest price of 33.7. In the recent period from September 7, 2025, to November 23, 2025, the stock declined by -4.91% with a standard deviation of 1.92, indicating lower volatility but a consistent downward slope.
In summary, QCOM demonstrates robust growth potential, while ON faces considerable challenges in its price trajectory.
Analyst Opinions
Recent analyst recommendations indicate a mixed sentiment towards two notable stocks. QUALCOMM Incorporated (QCOM) has received a “B+” rating, with analysts highlighting strong return metrics and a solid discounted cash flow outlook, suggesting a “buy” consensus. ON Semiconductor Corporation (ON) holds a “B” rating, reflecting decent performance but with some caution on earnings potential, leading to a “hold” consensus. Overall, the consensus for QCOM leans towards buy, while ON is viewed more neutrally.
Stock Grades
In this section, I present the latest stock grades for two prominent companies: QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON). These grades are provided by reputable grading companies, ensuring reliability in the investment decision-making process.
QUALCOMM Incorporated Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B of A Securities | Maintain | Buy | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-06 |
| Wells Fargo | Maintain | Underweight | 2025-11-06 |
| UBS | Maintain | Neutral | 2025-11-06 |
| Rosenblatt | Maintain | Buy | 2025-11-06 |
| Mizuho | Maintain | Outperform | 2025-11-06 |
| JP Morgan | Maintain | Overweight | 2025-11-04 |
| Rosenblatt | Maintain | Buy | 2025-10-28 |
| Citigroup | Maintain | Neutral | 2025-10-28 |
| UBS | Maintain | Neutral | 2025-10-27 |
ON Semiconductor Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Equal Weight | 2025-11-04 |
| Rosenblatt | Maintain | Neutral | 2025-11-04 |
| Truist Securities | Maintain | Hold | 2025-11-04 |
| TD Cowen | Maintain | Buy | 2025-11-04 |
| Baird | Maintain | Neutral | 2025-11-04 |
| UBS | Maintain | Neutral | 2025-10-27 |
| B of A Securities | Maintain | Neutral | 2025-09-05 |
| Rosenblatt | Maintain | Neutral | 2025-08-05 |
| UBS | Maintain | Neutral | 2025-08-05 |
| Benchmark | Maintain | Buy | 2025-08-05 |
Overall, the grades for QUALCOMM indicate a stable outlook with a mix of “Buy” and “Overweight” ratings, while ON Semiconductor shows a trend of “Neutral” with some “Buy” recommendations. This reflects a cautious but generally positive sentiment towards these companies in the market.
Target Prices
The consensus target prices for the companies I analyzed reflect positive expectations from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| QUALCOMM Incorporated (QCOM) | 210 | 165 | 190 |
| ON Semiconductor Corporation (ON) | 64 | 51 | 58.33 |
For QUALCOMM, the consensus target price of 190 indicates an upside potential from the current price of 163.3. Similarly, ON Semiconductor’s consensus of 58.33 suggests a positive outlook compared to its current price of 46.7.
Strengths and Weaknesses
The table below summarizes the strengths and weaknesses of Qualcomm Incorporated (QCOM) and ON Semiconductor Corporation (ON) based on their most recent financial data.
| Criterion | Qualcomm (QCOM) | ON Semiconductor (ON) |
|---|---|---|
| Diversification | High (3 segments) | Moderate (3 segments) |
| Profitability | Strong (12.5% net margin) | Moderate (22% net margin) |
| Innovation | Leading in 5G tech | Strong in automotive tech |
| Global presence | Extensive | Growing |
| Market Share | High | Moderate |
| Debt level | Moderate (29.5%) | Low (23.9%) |
Key takeaways indicate that Qualcomm excels in diversification and innovation, particularly in 5G technology, while ON Semiconductor shows stronger profitability and lower debt levels. Investors should consider these factors when making investment decisions.
Risk Analysis
The following table outlines the key risks associated with QUALCOMM Incorporated (QCOM) and ON Semiconductor Corporation (ON).
| Metric | QUALCOMM (QCOM) | ON Semiconductor (ON) |
|---|---|---|
| Market Risk | Moderate | High |
| Regulatory Risk | High | Moderate |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | High |
| Geopolitical Risk | High | Moderate |
Both companies face significant market and regulatory risks, particularly due to the semiconductor industry’s volatility and geopolitical tensions affecting supply chains. It’s crucial to consider these factors when making investment decisions.
Which one to choose?
When comparing QUALCOMM (QCOM) and ON Semiconductor (ON), the fundamentals indicate a stronger position for QCOM. With a market cap of $181B, QCOM has a gross profit margin of 55.4%, compared to ON’s 45.4%. QCOM also displays superior profitability with a net profit margin of 12.5% versus ON’s 22.2%, reflecting ON’s greater efficiency.
In terms of valuation, QCOM’s P/E ratio stands at 32.7, while ON’s is more attractive at 17.1, indicating it may be undervalued. However, QCOM has a bullish stock trend with a 12.9% increase over the last year, whereas ON is experiencing a bearish trend with a 44.1% decline.
For growth-focused investors, QCOM appears favorable, while those prioritizing value may find ON appealing despite its recent performance struggles. Both companies face risks, including market dependence and competition.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of QUALCOMM Incorporated and ON Semiconductor Corporation to enhance your investment decisions:
