As we reflect back on the just completed Q1 processors and graphics chips sector earnings season, we dig into the relative performance of Allegro MicroSystems (NASDAQ:ALGM) and its peers.
The biggest demand drivers for processors (CPUs) and graphics chips at the moment are secular trends related to 5G and Internet of Things, autonomous driving, and high performance computing in the data center space, specifically around AI and machine learning. Like all semiconductor companies, digital chip makers exhibit a degree of cyclicality, driven by supply and demand imbalances and exposure to PC and Smartphone product cycles.
The 9 processors and graphics chips stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.66%, while on average next quarter revenue guidance was 5.74% above consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but processors and graphics chips stocks held their ground better than others, with the share prices up 18.4% since the previous earnings results, on average.
Allegro MicroSystems (NASDAQ:ALGM)
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Allegro MicroSystems reported revenues of $269.4 million, up 34.5% year on year, beating analyst expectations by 1.67%. It was a very strong quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above expectations.
“We delivered a strong finish to fiscal year 2023, including record fourth quarter sales of $269 million, up 35% year-over-year. We also achieved record non-GAAP diluted earnings per share of $0.37, an increase of more than 75% year-over-year,” said Vineet Nargolwala, President and CEO of Allegro MicroSystems.
Allegro MicroSystems achieved the fastest revenue growth of the whole group. The stock is up 9.62% since the results and currently trades at $41.25.
Is now the time to buy Allegro MicroSystems? Access our full analysis of the earnings results here, it's free.
Best Q1: Nvidia (NASDAQ:NVDA)
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Nvidia reported revenues of $7.19 billion, down 13.2% year on year, beating analyst expectations by 10.3%. It was a very strong quarter for the company, with a significant improvement in inventory levels and a beat on the bottom line. The biggest highlight of Nvidia's quarter was revenue guidance for Q2, which was >50% ahead of expectations.
Nvidia scored the strongest analyst estimates beat among its peers. The stock is up 39.4% since the results and currently trades at $425.83.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Qualcomm (NASDAQ:QCOM)
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Qualcomm reported revenues of $9.28 billion, down 16.9% year on year, beating analyst expectations by 1.73%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in operating margin.
The stock is up 2.51% since the results and currently trades at $115.55.
Read our full analysis of Qualcomm's results here.
Qorvo (NASDAQ:QRVO)
Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.
Qorvo reported revenues of $632.7 million, down 45.7% year on year, beating analyst expectations by 1.83%. It was a mixed quarter for the company, with a significant improvement in inventory levels but a decline in operating margin. In addition, revenue guidance for the next quarter missed consensus estimates.
Qorvo had the slowest revenue growth among the peers. The stock is up 7.35% since the results and currently trades at $100.45.
Read our full, actionable report on Qorvo here, it's free.
Intel (NASDAQ:INTC)
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is the leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $11.7 billion, down 36.2% year on year, beating analyst expectations by 5.25%. It was a mixed quarter for the company, with bottom-line results surpassing expectations but a decline in operating margin.
The stock is up 10.2% since the results and currently trades at $32.89.
Read our full, actionable report on Intel here, it's free.
The author has no position in any of the stocks mentioned