Two stocks hitting 52-week highs today that may be catching investors’ attention are T-Mobile TMUS and Qualcomm QCOM. Notably, T-Mobile’s continued expansion made headlines this morning on the announcement that it would buy U.S. Cellular’s USM wireless operations for $4.4 billion.
Meanwhile, Qualcomm’s AI initiatives have been very compelling which has helped its stock spike +48% year to date with T-Mobile shares up a respectable +4%. Even better, over the last year, Qualcomm’s stock has now soared +94% with T-Mobile shares up +24%.
With that being said, let’s see if it’s still time to buy T-Mobile or Qualcomm’s stock for higher highs.
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T-Mobile’s Wireless Expansion
As the third largest wireless provider in the United States behind AT&T T and Verizon VZ, acquiring U.S. Cellular’s wireless operations will give T-Mobile access to another 4.5 million wireless customers and over 600 additional store locations along with certain specified spectrum assets. This comes as T-Mobile is already considered the largest wireless provider in terms of market cap at $194.53 billion.
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Based on Zacks estimates, T-Mobile’s total sales are currently projected to rise 1% in fiscal 2024 and are expected to edge up another 3% in FY25 to $82.51 billion. Better still, annual earnings are forecasted to soar 30% this year to $9.02 per share versus EPS of $6.93 in 2023. Plus, FY25 EPS is projected to climb another 23% to $11.15 a share.
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Qualcomm’s AI Initiatives
Joining the conversation of tech companies that are crucial to advancing artificial intelligence, Qualcomm has developed power-efficient on-device AI, edge cloud AI, and 5G technologies to make AI ubiquitous. Furthermore, the Qualcomm AI Hub is a plaftform that features a growing library of more than 100 pre-optimized AI models that cover various domains including IoT, mobile, and compute solutions.
With its goal of making AI ubiquitous fueling its growth, Qualcomm’s total sales are forecasted to rise 6% in FY24 and are projected to jump another 9% in FY25 to $41.85 billion. More impressive, annual earnings are expected to leap 17% in FY24 and are slated to increase another 10% next year to $10.88 per share.
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Valuation & Dividend Comparison
T-Mobile and Qualcomm’s stock hit fresh 52-week highs on Tuesday of $168 and $217 a share respectively. At current levels, T-Mobile’s stock trades at 18.4X forward earnings compared to Qualcomm’s 21.3X with their P/E valuations still beneath the S&P 500’s 22.2X.
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Making their growth and reasonable valuations more appealing is that T-Mobile and Qualcomm both offer annual dividend yields that are just over 1.5% which tops the S&P 500’s 1.27%.
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Bottom Line
T-Mobile and Qualcomm’s stock both land a Zacks Rank #3 (Hold). To that point, longer-term investors may continue to be rewarded although there could be better buying opportunities ahead considering the impressive rally in T-Mobile and Qualcomm’s stock over the last year.
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
United States Cellular Corporation (USM) : Free Stock Analysis Report
AT&T Inc. (T) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
