As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q3. Today we are looking at the processors and graphics chips stocks, starting with Broadcom (NASDAQ:AVGO).
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 solid Q3; on average, revenues beat analyst consensus estimates by 3.4% while next quarter's revenue guidance was in line with consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but processors and graphics chips stocks held their ground better than others, with the share prices up 20.6% on average since the previous earnings results.
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate that spans wireless, networking, data storage, and industrial end markets along with an infrastructure software business focused on mainframes and cybersecurity.
Broadcom reported revenues of $9.30 billion, up 4.3% year on year, in line with analyst expectations. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations and a decline in its gross margin.
"Broadcom's fiscal year 2023 revenue grew 8% year-over-year to a record $35.8 billion, driven by investments in accelerators and network connectivity for AI by hyperscalers," said Hock Tan, President and CEO of
The stock is up 20.1% since the results and currently trades at $1,105.
Is now the time to buy Broadcom? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $18.12 billion, up 206% year on year, outperforming analyst expectations by 12.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
Nvidia scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 9.9% since the results and currently trades at $549.16.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Based in the US, SMART Global Holdings (NASDAQ:SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $274.2 million, down 41.1% year on year, falling short of analyst expectations by 0.3%. It was a decent quarter for the company, with a significant improvement in its gross margin but an increase in its inventory levels.
SMART had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is up 10% since the results and currently trades at $20.33.
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 $8.63 billion, down 24.3% year on year, surpassing analyst expectations by 1.3%. It was a decent quarter for the company, with a solid beat of analysts' EPS estimates but a decline in its gross margin.
The stock is up 25.2% since the results and currently trades at $138.75.
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 $275.5 million, up 15.9% year on year, in line with analyst expectations. It was a decent quarter for the company, with an impressive beat of analysts' EPS estimates but underwhelming revenue guidance for the next quarter.
The stock is up 4.8% since the results and currently trades at $27.
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The author has no position in any of the stocks mentioned