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Qualcomm (NASDAQ:QCOM) is one of the leaders when it comes to telecommunication products. In addition to their suite of wireless networking chips, they are an aggressive player in the smartphone system-on-chip scene. The stock has lost 22% of its share price since mid-March and I believe that at these levels, the stock is incredibly attractive for a number of reasons.

First, the financials look excellent. The company has a net cash position of $13.90B, or roughly $8.12/share. Further, the latest earnings release was particularly exciting with a year-over-year revenue increase 28% and operating income increase of 123%. This is a sign that affirms the strength of the company and its offerings.

The stock, however, began showing weakness at the same earnings report in which the aforementioned record numbers were reported. Why? Guidance.

The company guided EPS of $0.83 - $0.89 on revenues of $4.45B - $4.85B which both came in slightly below consensus of $0.90 and $4.8B respectively. However, it's key to note that the soft guidance isn't representative of weak demand -- it's due primarily to the shortage of 28nm supply at Taiwan Semiconductor Corporation (NYSE:TSM).

And that's the key argument here: demand exceeds supply! This isn't exactly positive, but it does mean that these problems are likely temporary and that the company's products are highly sought after. This, to me, the recent share price drop represents an interesting buying opportunity with limited risk and high potential rewards.

In addition to the financials, it's worthwhile to take a look at the technology that Qualcomm puts out. While Qualcomm's dominance is very well known in the wireless arena, it is also an extremely strong competitor when it comes to designing smartphone system on chip solutions.

According to Anandtech, one of the leading technology review websites, the dual core Qualcomm Snapdragon S4 is able to significantly outperform existing ARM-designed (NASDAQ:ARMH) Cortex A9 and the Intel (NASDAQ:INTC) "Medfield" in most of the performance benchmarks. The Snapdragon S4's superiority is further bolstered by Microsoft's (NASDAQ:MSFT) decision to make it the official SoC for its Windows Phone 8 OS.

It's key to note here that while Qualcomm's chips use the ARM instruction set, the chip is designed by Qualcomm. This ability to design CPUs in-house gives Qualcomm a competitive advantage over the SoC designers such as Texas Instruments (NASDAQ:TXN) and NVIDIA (NASDAQ:NVDA) who use ARM-designed cores and then design the rest of the SoC around those cores.

One thing that could be of potential concern is that Qualcomm's price to earnings (not adjusted for net cash) is 18.86. This suggests that the market is (rightfully) pricing Qualcomm for nontrivial growth. However, the forward price to earnings of a much more modest 13.02 suggests that at these prices, Qualcomm represents a solid value, especially given the firm's history of meeting/exceeding analyst estimates.

Source: Why I'm Bullish On Qualcomm

Additional disclosure: I may initiate a long position in QCOM within the next 72 hours.