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 have a look at how the semiconductor manufacturing stocks have fared in Q2, starting with Marvell Technology (NASDAQ:MRVL).
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers and data storage. The growth of data and technologies like artificial intelligence, 5G networks and smart cars are also creating a next wave of growth for the industry. To keep up with ever changing customer needs requires new tools that can design, fabricate and test at ever smaller sizes and more complex architectures, and that is driving the demand for semiconductor capital manufacturing equipment.
The 4 semiconductor manufacturing stocks we track reported a decent Q2; on average, revenues beat analyst consensus estimates by 4.18%, while on average next quarter revenue guidance was 2.84% above consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021 and semiconductor manufacturing stocks have not been spared, with share price down 18.5% since the previous earnings results, on average.
Weakest Q2: Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.51 billion, up 40.9% year on year, inline with analyst expectations. It was a slower quarter for the company, with an underwhelming revenue guidance for the next quarter and a decline in operating margin.
"In the second quarter of fiscal 2023, we delivered record revenue of $1.52 billion, which grew 41 percent year over year and 5 percent sequentially. This was the 9th straight quarter of sequential revenue growth, and we are guiding for growth to continue in the third quarter, as we expand our leadership in data infrastructure," said Matt Murphy, Marvell's President and CEO.
Marvell Technology pulled off the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. The stock is down 21% since the results and currently trades at $43.52.
Best Q2: KLA Corporation (NASDAQ:KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $2.48 billion, up 29.1% year on year, beating analyst expectations by 2.7%. It was a very strong quarter for the company, with a significant improvement in operating margin and a beat on the bottom line.
The stock is down 15.1% since the results and currently trades at $313.99.
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Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company that built the tools for other companies to use to make semiconductors, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $6.52 billion, up 5.22% year on year, beating analyst expectations by 4.02%. It was a mixed quarter for the company, with a beat on the bottom line but a slow revenue growth.
Applied Materials had the slowest revenue growth in the group. The stock is down 21% since the results and currently trades at $85.54.
Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $4.63 billion, up 11.8% year on year, beating analyst expectations by 10%. It was a strong quarter for the company, with a beat on the bottom line and guidance for the next quarter above analysts' estimates.
Lam Research scored the strongest analyst estimates beat among the peers. The stock is down 17% since the results and currently trades at $387.95.
The author has no position in any of the stocks mentioned