Goldman Sachs Is a Mega-Bull On QUALCOMM (QCOM) Due to Massive Android Smarthphone Growth

Shares of QUALCOMM (Nasdaq: QCOM) are up a quick point this morning after analysts at Goldman Sachs placed their highest rating on the stock - Conviction Buy List - citing faster smartphone growth and product cycles.

Specifically, Goldman highlighted QUALCOMM's opportunity from Google's Android smartphone. QUALCOMM's chipsets are in 80% of Android-based smartphones and the company's Android ASPs are more than double its average ASP, according to the firm.

The firm estimates that every 1% share shift into Android-based smartphones translates to $0.06 in EPS upside for QUALCOMM. While the firm sees a relatively inline third quarter, they see fourth quarter EPS of $0.60, which tops the street consensus of $0.57, and FY11 EPS of $2.68, which is above the consensus of $2.51.

Goldman raised their smartphone forecasts for 2010-12 by 8-25%, citing much faster than expected smartphone growth, largely driven by Android. This translates into better handset ASPs, better chipset ASPs and margins and greater chipset market share for QUALCOMM.

Shares of QUALCOMM are up 2.9 percent to $34.92 in early action Monday. However, shares are down 17 percent over the last three-months and 24 percent year-to-date.

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