As Q3 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the processors and graphics chips stocks, including Qorvo (NASDAQ:QRVO) 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 decent Q3; on average, revenues beat analyst consensus estimates by 1.7% while next quarter's revenue guidance was 3.5% below consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but processors and graphics chips stocks held their ground better than others, with the share prices up 15.2% on average since the previous earnings results.
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 $1.10 billion, down 4.7% year on year, topping analyst expectations by 10.1%. It was a strong quarter for the company, with a significant improvement in its inventory levels and an impressive beat of analysts' EPS estimates.
Bob Bruggeworth, president and chief executive officer of Qorvo, said, “Qorvo delivered significantly improved financial performance in the September quarter supported by content gains at our largest customer. Each of our operating segments is enjoying multiyear technology upgrade cycles that improve performance and enhance functionality, and Qorvo is critical to enabling these capabilities. The Qorvo team continues to operate very well to secure new customer designs and broaden our opportunities in growth markets.”
The stock is up 18.4% since the results and currently trades at $104.21.
Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it's free.
Best 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 $18.12 billion, up 206% year on year, outperforming analyst expectations by 12.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
Nvidia scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 2.6% since the results and currently trades at $512.94.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
Weakest Q3: SMART (NASDAQ:SGH)
Based in the US, SMART Global Holdings (NASDAQ:SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $316.7 million, down 27.7% year on year, falling short of analyst expectations by 15.6%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts' revenue estimates.
SMART had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 23.4% since the results and currently trades at $18.05.
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 $14.16 billion, down 7.7% year on year, surpassing analyst expectations by 4.1%. It was a strong quarter for the company, with an impressive beat of analysts' EPS estimates and a significant improvement in its operating margin.
The stock is up 47.7% since the results and currently trades at $47.96.
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 $5.8 billion, up 4.2% year on year, surpassing analyst expectations by 1.9%. It was a mixed quarter for the company, with a significant improvement in its inventory levels but underwhelming revenue guidance for the next quarter.
The stock is up 46.2% since the results and currently trades at $143.98.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.
The author has no position in any of the stocks mentioned