The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Analog Devices (NASDAQ:ADI) and the rest of the analog semiconductors stocks fared in Q2.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
In light of this news, analog semiconductors stocks have held steady with share prices up 2.6% on average since the latest earnings results.
Analog Devices (NASDAQ:ADI)
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Analog Devices reported revenues of $2.31 billion, down 24.9% year on year. This print exceeded analysts’ expectations by 1.6%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EPS estimates but a decline in its gross margin.
"ADI's revenue finished above our guided midpoint with stronger profitability driving earnings per share near the high end of our outlook," said Vincent Roche, CEO and Chair.
Interestingly, the stock is up 5.2% since reporting and currently trades at $235.10.
Read our full report on Analog Devices here, it’s free.
Best Q2: Himax (NASDAQ:HIMX)
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Himax reported revenues of $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a significant improvement in its gross margin.
The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $6.34.
Is now the time to buy Himax? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Universal Display (NASDAQ:OLED)
Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Universal Display reported revenues of $158.5 million, up 8.1% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ EPS estimates and an increase in its inventory levels.
As expected, the stock is down 2.7% since the results and currently trades at $206.86.
Read our full analysis of Universal Display’s results here.
Power Integrations (NASDAQ:POWI)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $106.2 million, down 13.8% year on year. This print beat analysts’ expectations by 1.1%. Taking a step back, it was a mixed quarter as it also logged a significant improvement in its inventory levels but underwhelming revenue guidance for the next quarter.
The stock is flat since reporting and currently trades at $63.78.
Read our full, actionable report on Power Integrations here, it’s free.
Impinj (NASDAQ:PI)
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.
Impinj reported revenues of $102.5 million, up 19.2% year on year. This print topped analysts’ expectations by 5.2%. It was an exceptional quarter as it also produced a significant improvement in its inventory levels and gross margin.
Impinj scored the biggest analyst estimates beat among its peers. The stock is up 53.6% since reporting and currently trades at $234.
Read our full, actionable report on Impinj here, it’s free.
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