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Q1 Earnings Outperformers: Western Digital (NASDAQ:WDC) And The Rest Of The Semiconductors Stocks


Petr Huřťák /
2024/06/24 4:38 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the semiconductors industry, including Western Digital (NASDAQ:WDC) and its peers.

The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers, and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, Internet of Things, and smart cars are creating the next wave of secular growth for the industry.

The 41 semiconductors stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 1.8%. while next quarter's revenue guidance was in line with consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but semiconductors stocks have exhibited impressive performance, with the share prices up 10.9% on average since the previous earnings results.

Western Digital (NASDAQ:WDC)

Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.

Western Digital reported revenues of $3.46 billion, up 23.3% year on year, topping analysts' expectations by 3.2%. It was a very strong quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.

“As evidenced by our excellent third quarter results, Western Digital continues improving through-cycle profitability and dampening business cycles by leveraging our strategy of developing a diversified portfolio of industry-leading products across a broad range of end markets,” said David Goeckeler, Western Digital CEO.

Western Digital Total Revenue

The stock is up 9.5% since the results and currently trades at $76.06.

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

Best Q1: Micron Technology (NASDAQ:MU)

Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.

Micron Technology reported revenues of $5.82 billion, up 57.7% year on year, outperforming analysts' expectations by 8.8%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.

Micron Technology Total Revenue

The stock is up 46.4% since the results and currently trades at $140.89.

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

Weakest Q1: Microchip Technology (NASDAQ:MCHP)

Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.

Microchip Technology reported revenues of $1.33 billion, down 40.6% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.

Microchip Technology had the slowest revenue growth in the group. The stock is down 1.7% since the results and currently trades at $92.2.

Read our full analysis of Microchip Technology's results here.

Impinj (NASDAQ:PI)

Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software.

Impinj reported revenues of $76.83 million, down 10.6% year on year, surpassing analysts' expectations by 4.4%. It was a very strong quarter for the company, with a significant improvement in its inventory levels and an impressive beat of analysts' EPS estimates.

The stock is up 23.4% since the results and currently trades at $149.

Read our full, actionable report on Impinj 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. On the other hand, its full-year revenue and EBITDA guidance topped Wall Street's estimates.

Broadcom delivered the highest full-year guidance raise among its peers. The stock is up 11.8% since the results and currently trades at $1,669.

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

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