QUALCOMM (NASDAQ:QCOM) vs. Rambus (NASDAQ:RMBS) Head to Head Review

Rambus (NASDAQ:RMBS) and QUALCOMM (NASDAQ:QCOM) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Rambus and QUALCOMM, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rambus	0	2	4	2	3.00
QUALCOMM	1	7	13	0	2.57

Rambus presently has a consensus target price of $108.14, indicating a potential upside of 14.76%. QUALCOMM has a consensus target price of $191.00, indicating a potential upside of 7.13%. Given Rambus’ stronger consensus rating and higher probable upside, analysts clearly believe Rambus is more favorable than QUALCOMM.

Profitability

This table compares Rambus and QUALCOMM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rambus	33.72%	17.73%	15.20%
QUALCOMM	12.51%	43.22%	20.62%

Insider & Institutional Ownership

88.5% of Rambus shares are owned by institutional investors. Comparatively, 74.4% of QUALCOMM shares are owned by institutional investors. 1.0% of Rambus shares are owned by insiders. Comparatively, 0.1% of QUALCOMM shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Rambus and QUALCOMM”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rambus	$556.62 million	18.22	$179.82 million	$2.11	44.66
QUALCOMM	$44.28 billion	4.31	$5.54 billion	$4.89	36.46

QUALCOMM has higher revenue and earnings than Rambus. QUALCOMM is trading at a lower price-to-earnings ratio than Rambus, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Rambus has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, QUALCOMM has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Summary

Rambus beats QUALCOMM on 9 of the 15 factors compared between the two stocks.

About Rambus

Rambus Inc. provides semiconductor products in the United States, South Korea, Singapore, and internationally. The company offers DDR memory interface chips, including DDR5 and DDR4 memory interface chips to module manufacturers, OEMs, and hyperscalers; silicon IP, such as interface and security IP solutions that move and protect data in advanced data center, government, and automotive applications; and interface IP solutions for high-speed memory and chip-to-chip digital controller IP. It also provides a portfolios of security IP solutions, including crypto cores, hardware roots of trust, high-speed protocol engines, and chip provisioning technologies; and portfolio of patents that covers memory architecture, high-speed serial links, and security products. It markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.

About QUALCOMM

QUALCOMM Incorporated engages in the development and commercialization of foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, computing, multimedia, and position location products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and/or OFDMA-based 5G standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including 5G, artificial intelligence, automotive, consumer, enterprise, cloud, IoT, and extended reality, and investments, including non-marketable equity securities and, to a lesser extent, marketable equity securities, and convertible debt instruments. It also provides development, and other services and related products to the United States government agencies and their contractors. The company was incorporated in 1985 and is headquartered in San Diego, California.