The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how processors and graphics chips stocks fared in Q1, starting with Allegro MicroSystems (NASDAQ:ALGM).
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 an ok Q1; on average, revenues beat analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 4.7% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the processors and graphics chips stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.5% on average since the previous earnings results.
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 $240.6 million, down 10.7% year on year, exceeding analysts' expectations by 2.4%. Despite the top-line beat, it was a weaker quarter overall for the company with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
“Continued strong momentum in e-Mobility drove record fiscal year 2024 sales to more than $1 billion and record non-GAAP earnings per share of $1.35. We also achieved a record level of design wins of more than $1 billion. I would like to thank the entire Allegro team for their contributions which enabled us to achieve these significant milestones,” said Vineet Nargolwala, President and CEO of Allegro.
The stock is down 17.8% since reporting and currently trades at $24.13.
Read our full report on Allegro MicroSystems 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 $26.04 billion, up 262% year on year, outperforming analysts' expectations by 6%. It was an exceptional quarter for the company with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
Nvidia pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 18.3% since reporting. It currently trades at $112.24.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Lattice Semiconductor (NASDAQ:LSCC)
A global leader in its category, Lattice Semiconductor (NASDAQ:LSCC) is a semiconductor designer specializing in customer-programmable chips that enhance CPU performance for intensive tasks such as machine learning.
Lattice Semiconductor reported revenues of $140.8 million, down 23.6% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
Lattice Semiconductor had the slowest revenue growth in the group. As expected, the stock is down 29.6% since the results and currently trades at $54.16.
Read our full analysis of Lattice Semiconductor's results here.
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 $12.72 billion, up 8.6% year on year, in line with analysts' expectations. Taking a step back, it was a decent quarter for the company with a significant improvement in its gross margin but underwhelming revenue guidance for the next quarter.
Intel had the weakest performance against analyst estimates among its peers. The stock is down 11.2% since reporting and currently trades at $31.22.
Read our full, actionable report on Intel here, it's free.
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 $9.39 billion, up 1.2% year on year, in line with analysts' expectations. Revenue aside, it was a decent quarter for the company with a solid beat of analysts' EPS estimates but an increase in its inventory levels.
The stock is up 7.8% since reporting and currently trades at $177.07.
Read our full, actionable report on Qualcomm here, it's free.
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