Q3 Earnings Highs And Lows: Broadcom (NASDAQ:AVGO) Vs The Rest Of The Processors and Graphics Chips Stocks

Wrapping up Q3 earnings, we look at the numbers and key takeaways for the processors and graphics chips stocks, including Broadcom (NASDAQ:AVGO) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 12,447% above.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.4% since the latest earnings results.

Broadcom (NASDAQ:AVGO)

Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.

Broadcom reported revenues of $18.02 billion, up 28.2% year on year. This print exceeded analysts’ expectations by 3%. Overall, it was a very strong quarter for the company with a significant improvement in its inventory levels and revenue guidance for next quarter beating analysts’ expectations.

"In Q4, record revenue of $18.0 billion grew 28% year-over-year, driven primarily by AI semiconductor revenue increasing 74% year-over-year," said Hock Tan, President and CEO of Broadcom Inc.

The stock is down 16% since reporting and currently trades at $341.64.

Read why we think that Broadcom is one of the best processors and graphics chips stocks, our full report is free.

Best Q3: 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 $1.06 billion, up 1.1% year on year, outperforming analysts’ expectations by 1.9%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.8% since reporting. It currently trades at $86.47.

Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest 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 $214.3 million, up 14.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a mixed quarter as it posted EPS in line with analysts’ estimates.

As expected, the stock is down 12% since the results and currently trades at $27.06.

Read our full analysis of Allegro MicroSystems’s results here.

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 $11.27 billion, up 10% year on year. This result topped analysts’ expectations by 4.8%. It was an exceptional quarter as it also produced a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

The stock is flat since reporting and currently trades at $174.31.

Read our full, actionable report on Qualcomm here, it’s free for active Edge members.

AMD (NASDAQ:AMD)

Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.

AMD reported revenues of $9.25 billion, up 35.6% year on year. This print beat analysts’ expectations by 5.6%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ revenue estimates and revenue guidance for next quarter beating analysts’ expectations.

AMD delivered the biggest analyst estimates beat among its peers. The stock is down 13.9% since reporting and currently trades at $215.28.

Read our full, actionable report on AMD here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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