What's the better chip stock? Intel vs Qualcomm

Published Tue, Mar 17 20155:50 PM EDTUpdated Fri, Mar 27 201511:07 AM EDT

It's the old vs.the new. A company looking to reinvent itself versus one that was in the right place at the right time. On "Fast Money," as part of their Madness challenge, the traders on Tuesday afternoon will debate what is the better chip stock, Intel or Qualcomm? On CNBC Pro, we give you a preview of the traders' opinions so you can make your own decision right now. First let's look at the tale of the tape. Intel shares are down 16 percent this year on a weak PC environment and a strong dollar hurting foreign sales. Qualcomm is down 6 percent because of a lowered forecast due to competition from China. But Qualcomm still has a big tailwind because it's a key component for smartphones, something Intel is not. Nonetheless, "Fast Money" trader Steve Grasso is voting for Intel. He points out that the cloud serve business is taking a bigger and bigger portion of revenue for Intel. It's also making inroads into mobile. But more importantly, the company's fundamentals make for a better investment right now, Grasso said. Intel trades for 13 times estimated earnings and sports a dividend yield of 3.1 percent. Qualcomm also trades for 13 times earnings, but has a smaller dividend yield at 2.4 percent. With Intel's stock "just about at the low end of its trading range, risk reward sets up nicely for a trade or long-term entry," Grasso said. Read More A hidden bear market in Dow threatens all stocks Wall Street agrees. Analysts, on average, expect a 13 percent jump by Intel over the next 12 months to $35, according to FactSet. For Qualcomm, they expect a not-too-shabby 9 percent rise. UPDATE: After a vigorous debate on tonight's show, the winner is...Intel. The other three traders on the panel agreed with Grasso that Intel is very attractive on a valuation basis after its drop this year. Guy Adami thinks Qualcomm has something to prove and until it does, go with Intel. "I think QCOM needs to re-acquire the confidence of the market. Since mid-summer the stock has been under considerable pressure for any number of different reasons. I think the announcement of the $15 billion stock repurchase was a last ditch effort to regain said confidence." Dan Nathan was the one dissenter on the show. "I think if you get a weak market here, you pick it (Qualcomm) up in the mid-$60s...Intel is too PC-centric." How it works: For this year's Fast Money Madness Challenge, 16 technology companies square off against each other. Eight of the leading stocks in the S & P information technology index will go up against eight of the laggards. For the next three weeks on "Fast Money" (5 p.m. ET), the four panelists will vigorously debate the stock matchups in our bracket. CNBC Pro subscribers will get exclusive access to previews of each matchup before the show. There will never be any ties because the viewers' Twitter vote counts as the fifth trader. The winner of each matchup will move on to the next round. Before each game to be played that night, just tweet your ticker picks to @cnbcfastmoney using the hashtag #fastmoneymadness. Then watch "Fast Money" each night to see your how your pick does in the game.

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It's the old vs.the new. A company looking to reinvent itself versus one that was in the right place at the right time.

On "Fast Money," as part of their Madness challenge, the traders on Tuesday afternoon will debate what is the better chip stock, Intel or Qualcomm? On CNBC Pro, we give you a preview of the traders' opinions so you can make your own decision right now.

First let's look at the tale of the tape. Intel shares are down 16 percent this year on a weak PC environment and a strong dollar hurting foreign sales. Qualcomm is down 6 percent because of a lowered forecast due to competition from China. But Qualcomm still has a big tailwind because it's a key component for smartphones, something Intel is not.

Nonetheless, "Fast Money" trader Steve Grasso is voting for Intel.

He points out that the cloud serve business is taking a bigger and bigger portion of revenue for Intel. It's also making inroads into mobile. But more importantly, the company's fundamentals make for a better investment right now, Grasso said.