As we reflect back on the just completed Q2 processors and graphics chips sector earnings season, we dig into the relative performance of Qualcomm (NASDAQ:QCOM) 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 mixed Q2; on average, revenues beat analyst consensus estimates by 4%, while on average next quarter revenue guidance was 3.35% above consensus. Technology stocks have been hit hard on fears of higher interest rates as investors search for near-term cash flows and while some of the processors and graphics chips stocks have fared somewhat better than others, they have not been spared, with share prices declining 9.37% since the previous earnings results, on average.
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 $8.45 billion, down 22.7% year on year, missing analyst expectations by 0.66%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
Qualcomm delivered the weakest performance against analyst estimates of the whole group. The stock is down 15% since the results and currently trades at $109.91.Is now the time to buy Qualcomm? Read our full report on Qualcomm here.
Best Q2: 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 $13.5 billion, up 101% year on year, beating analyst expectations by 21.9%. It was an incredible quarter for the company, with beats across nearly every key metric. Nvidia's revenue guidance for the next quarter also blew past analysts' expectations.
Nvidia scored the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is down 4.77% since the results and currently trades at $449.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $5.36 billion, down 18.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
The stock is down 11% since the results and currently trades at $104.66.
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 $190.1 million, up 17.8% year on year, beating analyst expectations by 1.47%. It was a decent quarter for the company, with a significant improvement in its inventory levels. In addition, while next quarter's revenue guidance was roughly in line with consensus expectations, gross margin and non-GAAP operating profit guidance were slightly ahead.
The stock is down 1.15% since the results and currently trades at $90.
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 $12.9 billion, down 15.5% year on year, beating analyst expectations by 6.69%. It was a solid quarter for the company, with a significant improvement in its inventory levels. In addition, next quarter's revenue and EPS guidance both slightly exceeded consensus expectations.
The stock is up 11.4% since the results and currently trades at $38.51.
The author has no position in any of the stocks mentioned