The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Intel (NASDAQ:INTC) and the rest of the processors and graphics chips stocks fared in Q3.
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 7 processors and graphics chips stocks we track reported a weak Q3; on average, revenues beat analyst consensus estimates by 1.33%, while on average next quarter revenue guidance was 8.57% under 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 6.85% since the previous earnings results, on average.
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 $15.3 billion, down 20% year on year, in line with analyst expectations. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.
Intel delivered the slowest revenue growth and weakest full year guidance update of the whole group. The stock is up 5.53% since the results and currently trades at $27.67.
Best Q3: 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 $237.6 million, up 22.7% year on year, beating analyst expectations by 5.61%. It was a very strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.
Allegro MicroSystems achieved the strongest analyst estimates beat among its peers. The stock is up 31.4% since the results and currently trades at $29.79.
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Weakest 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 $5.93 billion, down 16.5% year on year, beating analyst expectations by 1.91%. It was a weak quarter for the company, with declining revenue and underwhelming revenue guidance for the next quarter.
The stock is down 7.4% since the results and currently trades at $147.59.
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 $1.15 billion, down 7.74% year on year, beating analyst expectations by 2.45%. It was a weak quarter for the company, with declining revenue and underwhelming revenue guidance for the next quarter.
The stock is up 7.26% since the results and currently trades at $91.00
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 $8.93 billion, up 20.5% year on year, in line with analyst expectations. It was a decent quarter for the company, with a significant improvement in inventory levels and guidance for the next quarter above analysts' expectations.
The stock is up 4.73% since the results and currently trades at $556.68.
The author has no position in any of the stocks mentioned