Looking back on processors and graphics chips stocks' Q2 earnings, we examine this quarter's best and worst performers, including AMD (NASDAQ:AMD) 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 Q2; on average, revenues beat analyst consensus estimates by 4%, while on average next quarter revenue guidance was 3.35% above consensus. Technology stocks have been hit hard by fears of higher interest rates as investors search for near-term cash flows and processors and graphics chips stocks have not been spared, with share prices down 10.3% since the previous earnings results, on average.
Weakest Q2: AMD (NASDAQ:AMD)
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices or AMD (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
AMD reported revenues of $5.36 billion, down 18.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
“We delivered strong results in the second quarter as 4th Gen EPYC and Ryzen 7000 processors ramped significantly,” said AMD Chair and CEO Dr. Lisa Su.
The stock is down 13.9% since the results and currently trades at $101.3.
Is now the time to buy AMD? Access our full analysis of the earnings results here, it's free.
Best Q2: 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 $13.5 billion, up 101% year on year, beating analyst expectations by 21.9%. It was an incredible quarter for the company, with beats across nearly every key metric. Nvidia's revenue guidance for the next quarter also blew past analysts' expectations.
Nvidia scored the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 7.21% since the results and currently trades at $437.25.
Is now the time to buy Nvidia? Access our full analysis of the earnings results 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 $8.45 billion, down 22.7% year on year, missing analyst expectations by 0.66%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
Qualcomm had the weakest performance against analyst estimates in the group. The stock is down 12.3% since the results and currently trades at $113.4.
Read our full analysis of Qualcomm's results here.
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 $278.3 million, up 27.8% year on year, beating analyst expectations by 1.84%. It was a decent quarter for the company, with a significant improvement in its operating margin. On the other hand, its inventory levels materially increased.
The stock is down 36.1% since the results and currently trades at $33.
Read our full, actionable report on Allegro MicroSystems here, it's free.
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 $651.2 million, down 37.1% year on year, beating analyst expectations by 1.79%. It was a mixed quarter for the company, with an impressive beat of analysts' EPS estimates but a decline in its operating margin and increasing inventory levels.
Qorvo had the slowest revenue growth among the peers. The stock is down 9.64% since the results and currently trades at $95.8.
Read our full, actionable report on Qorvo here, it's free.
The author has no position in any of the stocks mentioned