As we reflect back on the just completed Q3 processors and graphics chips sector earnings season, we dig into the relative performance of NVIDIA (NASDAQ:NVDA) and its peers.
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 5 processors and graphics chips stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 3.02%, while on average next quarter revenue guidance was 2.54% above consensus. Tech stocks have had a rocky start in 2022, but processors and graphics chips stocks held their ground better than others, with share price down 7.41% since earnings, on average.
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading designer of chips used in gaming, PCs, data centers, and a variety of end markets.
NVIDIA reported revenues of $7.1 billion, up 50.2% year on year, beating analyst expectations by 4.25%. It was an impressive quarter for the company, with a very optimistic guidance for the next quarter and an exceptional revenue growth.
“The third quarter was outstanding, with record revenue,” said Jensen Huang, founder and CEO of NVIDIA.
The stock is down 14.2% since the results and currently trades at $250.85.
Best Q3: AMD (NASDAQ:AMD)
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 $4.31 billion, up 53.9% year on year, beating analyst expectations by 4.85%. It was a stunning quarter for the company, with a significant improvement in gross margin and revenue guidance above analyst estimates.
AMD achieved the fastest revenue growth among its peers. The stock is up 4.36% since the results and currently trades at $128.30.
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Slowest Q3: Broadcom (NASDAQ:AVGO)
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 $7.4 billion, up 14.5% year on year, in line with analyst expectations. It was a decent quarter for the company, with a very optimistic guidance for the next quarter but a slower revenue growth.
The stock is down 3.24% since the results and currently trades at $564.50.
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 $19.1 billion, up 4.68% year on year, beating analyst expectations by 5.02%. It was a solid quarter for the company, with revenue guidance above analyst estimates.
Intel delivered the strongest analyst estimates beat but had the slowest revenue growth among the peers. The stock is down 3.94% since the results and currently trades at $53.82.
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 $1.25 billion, up 18.3% year on year, in line with analyst expectations. It was a decent quarter for the company, with a significant improvement in inventory levels but an underwhelming revenue guidance for the next quarter.
Qorvo had the weakest performance against analyst estimates among the peers. The stock is down 19.9% since the results and currently trades at $142.48.
The author has no position in any of the stocks mentioned