Quarterly earnings results are a good time to check in on a company’s progress, especially compared to other peers in the same sector. Today we are looking at Lattice Semiconductor (NASDAQ:LSCC), and the best and worst performers in the processors and graphics chips group.
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 under pressure as inflation makes their long-dated profits less valuable, but processors and graphics chips stocks held their ground better than others, with the share prices up 17.8% since the previous earnings results, on average.
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 $184.3 million, up 22.5% year on year, beating analyst expectations by 3.36%. It was a strong quarter for the company, with a significant improvement in operating margin. Revenue guidance for the next quarter also came in ahead of consensus.
Jim Anderson, president and CEO, said, "Our strong growth and customer momentum continued into the first quarter of 2023 with a 22% year-over-year increase in revenue. We drove 55% year-over-year growth in net income on a GAAP basis and 36% on a non-GAAP basis. While we’re not immune to macro-economic challenges impacting the industry, we have Lattice-specific growth drivers, which position us well for long-term growth in our core markets. "
The stock is up 9.46% since the results and currently trades at $89.31.
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 34.1% since the results and currently trades at $409.62.
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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 4.21% since the results and currently trades at $117.47.
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 $5.35 billion, down 9.07% 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 operating margin. Management added that the company was still dealing with "a mixed demand environment" in which revenue growth is expected to be "flattish" during the rest of the first half of the year.
The stock is up 20.8% since the results and currently trades at $108.58.
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 a beat on the bottom line but a decline in operating margin.
The stock is up 12.2% since the results and currently trades at $33.49.
The author has no position in any of the stocks mentioned