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Strong cash flow is an important indicator of a company’s healthy operations, allowing it to pay down debt, increase shareholder value and sustain long-term growth.
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Semiconductor company Qualcomm stands out for its 15% year-over-year cash flow increase last quarter.
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Gilead Sciences and Exxon Mobil both have healthy cash flows that allow for attractive dividend distributions.
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Interested in Qualcomm? Here are five stocks we like better.
Of the many financial metrics an investor may consider when deciding whether to buy shares of a target company, cash flow is one of the most important. Operating cash flow reflects the actual performance of a company’s day-to-day operations and indicates the company’s ability to obtain funds from sales or other sources and adequately pay wages, taxes and other expenses. Free cash flow, on the other hand, shows how much money a company has left after accounting for operating expenses and capital expenditures (CapEx), which is discretionary cash available for expansion, shareholder returns, M&A, and more.
A company’s cash flow sustains its operations, supports the possibility of growth and expansion, and reduces the risk of bankruptcy. Many investors also find this metric harder to manipulate in financial reports than net profit, which can look better or worse depending on the accounting method. As we enter the new year, investors looking for strong cash flow might start with some of the following companies.
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Qualcomm Incorporated (NASDAQ: QCOM ) is a major supplier of semiconductors used in cell phones, vehicles and a variety of smart devices. Shares showed fairly steady momentum during the final two-thirds of 2025, trending upward from April through the end of the year, but Qualcomm’s gains still put it below the astronomical valuations of some semiconductor rivals.
For investors looking for cash generation potential, though, Qualcomm may stand out as its free cash flow in the most recently reported quarter was $12.8 billion, up 15% year over year and a quarterly record for the company. Operating cash flow also increased significantly, as Qualcomm’s mobile and automotive divisions saw particularly strong sales growth. This means that despite the huge capital expenditures, Qualcomm ended the quarter with about $7.8 billion in cash reserves, which is basically unchanged from the same period last year but indicates a strong financial position heading into the next quarter.
