As processors and graphics chips stocks’ Q4 earnings season wraps, let's dig into this quarter's best and worst performers, including 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 9 processors and graphics chips stocks we track reported a weaker Q4; on average, revenues beat analyst consensus estimates by 0.72%, while on average next quarter revenue guidance was 3.36% under 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 2.59% since the previous earnings results, on average.
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 $6.05 billion, down 20.8% year on year, in line with analyst expectations. It was a weaker quarter for the company, with declining revenue and operating margin.
"AI is at an inflection point, setting up for broad adoption reaching into every industry,” said Jensen Huang, founder and CEO of NVIDIA.
The stock is up 12.1% since the results and currently trades at $233.16.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Best Q4: 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 $176 million, up 24.1% year on year, in line with analyst expectations. It was a solid quarter for the company, with a significant improvement in operating margin and revenue guidance for the next quarter above analysts' estimates.
The stock is up 7.46% since the results and currently trades at $88.88.
Is now the time to buy Lattice Semiconductor? Access our full analysis of the earnings results here, it's free.
Weakest Q4: 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 $14 billion, down 31.6% year on year, missing analyst expectations by 3.67%. It was a weak quarter for the company, with declining revenue and underwhelming revenue guidance for the next quarter.
Intel had the weakest performance against analyst estimates in the group. The stock is down 15% since the results and currently trades at $25.56.
Based in the US, SMART Global Holdings (NASDAQ:SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $465.5 million, down 0.95% year on year, beating analyst expectations by 4.4%. It was a weak quarter for the company, with slow revenue growth and an increase in inventory levels.
SMART achieved the strongest analyst estimates beat among the peers. The stock is up 9.05% since the results and currently trades at $16.5.
Allegro MicroSystems (NASDAQ:ALGM)
The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ:ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.
Allegro MicroSystems reported revenues of $248.8 million, up 33.3% year on year, beating analyst expectations by 1.58%. It was a very strong quarter for the company, with a beat on the bottom line.
Allegro MicroSystems achieved the fastest revenue growth among the peers. The stock is up 32.4% since the results and currently trades at $45.57.
The author has no position in any of the stocks mentioned