Arm and Qualcomm Lead Mobile Chip Design. 1 Stock Is the Better Buy.

Qualcomm and Arm Holdings, leaders in mobile chip design, both saw their stock prices plummet 14% following earnings reports on November 4. Qualcomm missed earnings estimates while Arm provided a weaker-than-expected outlook. Despite Arm's superior market position and growth prospects, its valuation at 220x P/E is too expensive. Qualcomm trades cheaper at 19x earnings but faces margin pressures. The author recommends waiting for better valuations before buying either stock.