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A Look Back at Processors and Graphics Chips Stocks' Q3 Earnings: Qualcomm (NASDAQ:QCOM) Vs The Rest Of The Pack


Jabin Bastian /
2023/01/11 4:03 am EST
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The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s have a look at how Qualcomm (NASDAQ:QCOM) and the rest of the processors and graphics chips stocks fared in Q3.

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 7 processors and graphics chips stocks we track reported a weak Q3; on average, revenues beat analyst consensus estimates by 1.33%, while on average next quarter revenue guidance was 8.57% 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 12.9% since the previous earnings results, on average.

Qualcomm (NASDAQ:QCOM)

Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM), is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.

Qualcomm reported revenues of $11.3 billion, up 22% year on year, in line with analyst expectations. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.

Qualcomm Total Revenue

The stock is up 2.92% since the results and currently trades at $115.86.

Is now the time to buy Qualcomm? Access our full analysis of the earnings results here, it's free.

Best Q3: 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 $237.6 million, up 22.7% year on year, beating analyst expectations by 5.61%. It was a very strong quarter for the company, with a beat on the bottom line and very optimistic guidance for the next quarter.

Allegro MicroSystems Total Revenue

Allegro MicroSystems achieved the strongest analyst estimates beat among its peers. The stock is up 41.2% since the results and currently trades at $32.00.

Is now the time to buy Allegro MicroSystems? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Nvidia (NASDAQ:NVDA)

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 $5.93 billion, down 16.5% year on year, beating analyst expectations by 1.91%. It was a weak quarter for the company, with declining revenue and underwhelming guidance for the next quarter.

The stock is down 0.19% since the results and currently trades at $159.09.

Read our full analysis of Nvidia's results here.

Qorvo (NASDAQ:QRVO)

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 $1.15 billion, down 7.74% year on year, beating analyst expectations by 2.45%. It was a weak quarter for the company, with declining revenue and underwhelming guidance for the next quarter.

The stock is up 13.2% since the results and currently trades at $96.12.

Read our full, actionable report on Qorvo here, it's free.

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 $5.56 billion, up 29% year on year, missing analyst expectations by 1.48%. It was a weak quarter for the company, with a full year guidance missing analysts' expectations.

AMD achieved the fastest revenue growth and highest full year guidance raise, but had the weakest performance against analyst estimates among the peers. The stock is up 13.7% since the results and currently trades at $67.87.

Read our full, actionable report on AMD here, it's free.

The author has no position in any of the stocks mentioned