As semiconductor manufacturing stocks’ Q3 earnings season wraps, let's dig into this quarter's best and worst performers, including Marvell Technology (NASDAQ:MRVL) and its peers.
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 Q3; on average, revenues beat analyst consensus estimates by 2.97%, while on average next quarter revenue guidance was 2.03% above consensus. Increasing interest rates hurt growth companies as investors search for near-term cash flows, but semiconductor manufacturing stocks held their ground better than others, with the share prices up 17.4% since the previous earnings results, on average.
Weakest Q3: 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 $1.53 billion, up 26.9% year on year, missing analyst expectations by 1.28%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.
"In the third quarter of fiscal 2023, we delivered revenue of $1.54 billion, a record for Marvell, growing 27 percent year over year driven by our key growth drivers of cloud, 5G and automotive, as well as share and content gains in our enterprise networking end market," said Matt Murphy, Marvell's President and CEO.
Marvell Technology delivered the weakest performance against analyst estimates of the whole group. The stock is down 10.7% since the results and currently trades at $40.49.
Best Q3: 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 $2.72 billion, up 30.7% year on year, beating analyst expectations by 4.95%. It was a strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.
KLA Corporation scored the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is up 35.2% since the results and currently trades at $415.
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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 $6.74 billion, up 10.2% year on year, beating analyst expectations by 4.85%. It was a decent quarter for the company, with a beat on the bottom line but slow revenue growth.
Applied Materials had the slowest revenue growth in the group. The stock is up 4.58% since the results and currently trades at $109.28.
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 $5.07 billion, up 17.8% year on year, beating analyst expectations by 3.36%. It was a strong quarter for the company, with a beat on the bottom line and revenue guidance for the next quarter above analyst expectations.
The stock is up 40.7% since the results and currently trades at $465.05.
The author has no position in any of the stocks mentioned