QUALCOMM Incorporated (QCOM) vs Western Digital Corporation (WDC): Which Is the Better Buy in 2026?
As of 2026-06-19, QCOM is overvalued at $226, with a DCF intrinsic value of $128 and a margin of safety of -76%. WDC is overvalued at $746, with an intrinsic value of $423 and a margin of safety of -76%. Of the two, QCOM has the wider margin of safety.
Rewards
- ★QUALCOMM Incorporated has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★QUALCOMM Incorporated scores 73/100 on the Economic Moat Score (Wide Moat), with reinvestment efficiency as the strongest competitive dimension.
- ★Free cash flow has grown at a 23.3% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Free cash flow has grown at a 19.1% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★PEG ratio of 0.61 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Altman Z-Score of 5.53 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠FCF yield of 5.4% suggests reasonable valuation assuming continued moderate growth.
- ⚠15 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
- ⚠Share count has increased by 10% over the past 4 years, diluting existing shareholders.
- ⚠Despite buyback spending, shares outstanding increased in 2 out of 2 years — stock-based compensation is offsetting repurchases.
- ⚠FCF yield of 0.8% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $226?
The market implies +17.5% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +7.0%, reflecting heavy growth investment.
What growth rate is the market pricing in at $746?
Economic Moat Score
Learn more →Wide moat driven primarily by reinvestment efficiency. Revenue Predictability is the area most vulnerable to competitive pressure.
No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
Forensic Accounting
Learn more →M-Score Trend
Insufficient data for Beneish M-Score calculation (requires 2+ years).
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: QCOM vs WDC
Is QUALCOMM Incorporated or Western Digital Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, QCOM trades at a -76.1% margin of safety (intrinsic value $128 vs. price $226), compared to WDC's -76.4% margin of safety (intrinsic $423 vs. $746).
Which stock has a wider economic moat, QUALCOMM Incorporated or Western Digital Corporation?▼
QCOM scores 73/100 (Wide moat), while WDC scores 30/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, QUALCOMM Incorporated or Western Digital Corporation?▼
QUALCOMM Incorporated (QCOM) generates a 5.4% free cash flow yield, compared to Western Digital Corporation's 0.8%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, QUALCOMM Incorporated or Western Digital Corporation?▼
WDC earns 30.2% ROIC versus QCOM's 18.2%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, QUALCOMM Incorporated's or Western Digital Corporation's?▼
WDC's dividend earns a safety score of 85/100 (Very Safe), compared to QCOM's 84/100 (Very Safe). WDC has raised its dividend for 0 consecutive years.