The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how analog semiconductors stocks fared in Q3, starting with Microchip Technology (NASDAQ:MCHP).
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 7,676% above.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $1.14 billion, down 2% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a significant improvement in its inventory levels but revenue guidance for next quarter missing analysts’ expectations significantly.
Steve Sanghi, Microchip’s CEO and President commented that "Our second quarter results demonstrate continued momentum in our recovery, with net sales of $1.140 billion growing 6% sequentially and above the midpoint of our guidance. The operational improvements we have implemented are translating into meaningful financial progress despite the broader market recovery developing more gradually than anticipated. We believe our operational capabilities position us to outperform as conditions improve."
Interestingly, the stock is up 12% since reporting and currently trades at $66.45.
Is now the time to buy Microchip Technology? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Skyworks Solutions (NASDAQ:SWKS)
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Skyworks Solutions reported revenues of $1.1 billion, up 7.3% year on year, outperforming analysts’ expectations by 5.4%. The business had a stunning quarter with a beat of analysts’ EPS estimates 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 3.5% since reporting. It currently trades at $69.43.
Is now the time to buy Skyworks Solutions? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Universal Display (NASDAQ:OLED)
Serving major consumer electronics manufacturers, Universal Display (NASDAQ:OLED) is a provider of organic light emitting diode (OLED) technologies used in display and lighting applications.
Universal Display reported revenues of $139.6 million, down 13.6% year on year, falling short of analysts’ expectations by 15.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
Universal Display delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 10.2% since the results and currently trades at $121.72.
Read our full analysis of Universal Display’s results here.
MACOM (NASDAQ:MTSI)
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
MACOM reported revenues of $261.2 million, up 30.1% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also produced revenue guidance for next quarter topping analysts’ expectations but an increase in its inventory levels.
MACOM delivered the fastest revenue growth among its peers. The stock is up 24.5% since reporting and currently trades at $186.41.
Read our full, actionable report on MACOM here, it’s free for active Edge members.
Vishay Intertechnology (NYSE:VSH)
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $790.6 million, up 7.5% year on year. This number surpassed analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates but EPS in line with analysts’ estimates.
The stock is down 5% since reporting and currently trades at $15.30.
Read our full, actionable report on Vishay Intertechnology here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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