Does Qualcomm Know Something That Rivals Don’t?

Thursday, 15 Nov 2012 | 6:09 PM ET

The future may appear challenging from some chip makers – some, but not all.

Qualcomm said on Thursday that it expects a compound annual growth rate of at least 10 percent for its revenue and earnings per share over the next five years.

And that's despite a global economy that's lackluster at best.

According to CEO Paul Jacobs, because demand for gadgets that Qualcomm supplies remains strong, the weak economy has had a "somewhat muted" effect on Qualcomm, he said.

The same can't be said of Qualcomm rivals.

Inside Qualcomm with CEO Paul Jacobs
At the company's analyst meeting Thursday, Qualcomm astounded investors with its forecast. What exactly is in store for the future? CNBC's Jon Fortt gets the details from CEO Paul Jacobs.

BothIntel and Texas Instruments gave bleak forecasts in their quarterly reports, Bernstein analyst Stacy Rasgon said.

"The fact that Qualcomm is looking at strong growth, that they have relatively conservative assumptions behind that growth, is promising," he added in a Reuters interview. "We're going to be lucky if semiconductors are flat next year and Qualcomm is guiding up," he said.

According to previously released data, at least 150 smartphones and tablets use Qualcomm chips – that includesApple's iPhone and iPad.

And in a live interview on CNBC's Fast Money, Jacbos suggested two other catalyst could drive shares – overseas demand and something called small cell.

"How people get wireless service will shift – home routers will become a kind of tower and qualcomm will provide the chips," explained the CEO.

On November 7 Qualcomm reported fiscal year 2012 earnings per share of $3.51, up 39 percent from the year before and revenue of $19.12 billion, up 28 percent from the year before. Its fiscal year ended September 30.

Fast Money trader Guy Adami is a buyer. "It's not impervious to the tape," he said, "but if you believe current weakness is a pause in a larger bull market then this stock is in the sweet spot."

Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On November 15, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Karen Finerman Is Long AAPL; Karen Finerman Is Long JPM; Karen Finerman Is Long WMT; Karen Finerman Is Long TGT; Karen Finerman Is Long MSFT; Karen Finerman Is Long GOOG; Karen Finerman Is Long M; Karen Finerman Is Long FL; Karen Finerman Is Long JCP; Jon Najarian Is Long AAPL; Jon Najarian Is Long TGT; Jon Najarian Is Long FB; Jon Najarian Is Long LGF; Jon Najarian Is Long RHT; Jon Najarian Is Long GRPN; Jon Najarian Is Long CCL; Jon Najarian Is Long LRCX; Jon Najarian Is Long GLOU; Jon Najarian Is Long STSI; Jon Najarian Is Long CME; Jon Najarian Is Long CBOE; Guy Adami Is Long C; Guy Adami Is Long GS; Guy Adami Is Long INTC; Guy Adami Is Long MSFT; Guy Adami Is Long AGU; Guy Adami Is Long NUE; Guy Adami Is Long BTU; Steve Grasso is long ACI; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long BTU; Steve Grasso is long CLF; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN

CNBC.com with wires.


Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report