As we reflect back on the just completed Q2 semiconductors sector earnings season, we dig into the relative performance of Micron Technology (NASDAQ:MU) and its peers.
The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, Internet of Things and smart cars are creating a next wave of secular growth for the industry.
The 22 semiconductors stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 1.17%, while on average next quarter revenue guidance was 3.29% under consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021 and semiconductors stocks have not been spared, with share prices down 20.5% since the previous earnings results, on average.
Micron Technology (NASDAQ:MU)
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Micron Technology reported revenues of $6.64 billion, down 19.8% year on year, missing analyst expectations by 1.95%. It was a weak quarter for the company, with a revenue decline and an underwhelming revenue guidance for the next quarter.
“In fiscal 2022, Micron generated record revenue of $30.8 billion and delivered our sixth consecutive year of positive free cash flow, allowing us to return a record $2.9 billion to our shareholders,” said Micron Technology President and CEO Sanjay Mehrotra.
The stock is up 2.67% since the results and currently trades at $51.38.
Best Q2: Monolithic Power Systems (NASDAQ:MPWR)
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Monolithic Power Systems reported revenues of $461 million, up 57.1% year on year, beating analyst expectations by 7.06%. It was an exceptional quarter for the company, with a beat on the bottom line and a significant improvement in operating margin.
The stock is down 25.4% since the results and currently trades at $344.23.
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Weakest Q2: Intel (NASDAQ:INTC)
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 22% year on year, missing analyst expectations by 14.5%. It was a weak quarter for the company, with revenue guidance for both the next quarter and the full year missing analysts' expectations.
Intel had the weakest performance against analyst estimates, revenue decline, and weakest full year guidance update in the group. The stock is down 36.2% since the results and currently trades at $25.29.
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.
The stock is down 19.8% since the results and currently trades at $374.5.
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.
The stock is down 15.5% since the results and currently trades at $312.63.
The author has no position in any of the stocks mentioned