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Processors and Graphics Chips Stocks Q1 In Review: SMART (NASDAQ:SGH) Vs Peers


Max Juang /
2024/07/05 6:29 am EDT

Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at SMART (NASDAQ:SGH) 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 an ok Q1; on average, revenues beat analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 5% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, but processors and graphics chips stocks have shown resilience, with share prices up 5.7% on average since the previous earnings results.

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 $284.8 million, down 26.7% year on year, falling short of analysts' expectations by 0.1%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

“The second quarter marked a period of continued progress towards our transformation into a high-value enterprise solutions company,” said CEO Mark Adams.

SMART Total Revenue

SMART delivered the slowest revenue growth of the whole group. The stock is down 10.1% since the results and currently trades at $23.3.

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

Best Q1: 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 $26.04 billion, up 262% year on year, outperforming analysts' expectations by 6%. It was an exceptional quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.

Nvidia Total Revenue

Nvidia scored the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 35% since the results and currently trades at $128.12.

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

Weakest Q1: 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 $140.8 million, down 23.6% year on year, in line with analysts' 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 18.8% since the results and currently trades at $62.41.

Read our full analysis of Lattice Semiconductor's results here.

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 $12.72 billion, up 8.6% year on year, falling short of analysts' expectations by 0.4%. It was a decent quarter for the company, with a significant improvement in its gross margin but underwhelming revenue guidance for the next quarter.

Intel had the weakest performance against analyst estimates among its peers. The stock is down 10.9% since the results and currently trades at $31.31.

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

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 $12.49 billion, up 43% year on year, surpassing analysts' expectations by 4%. It was a mixed quarter for the company, with a miss of analysts' EPS estimates and a decline in its operating margin.

The stock is up 17.6% since the results and currently trades at $1,756.7.

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

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