Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Intel (NASDAQ:INTC) and the best and worst performers in the processors and graphics chips industry.
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 8 processors and graphics chips stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 14,226% above.
While some processors and graphics chips stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.8% since the latest earnings results.
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 a leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $13.65 billion, up 2.8% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
“Our Q3 results reflect improved execution and steady progress against our strategic priorities,” said Lip-Bu Tan, Intel CEO.
Interestingly, the stock is up 6% since reporting and currently trades at $40.41.
Is now the time to buy Intel? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 6% since reporting. It currently trades at $89.15.
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 7.3% since the results and currently trades at $28.50.
Read our full analysis of Allegro MicroSystems’s results here.
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 $57.01 billion, up 62.5% year on year. This result surpassed analysts’ expectations by 2.8%. Overall, it was a strong quarter as it also put up revenue guidance for next quarter beating analysts’ expectations and an impressive beat of analysts’ adjusted operating income estimates.
Nvidia delivered the fastest revenue growth among its peers. The stock is down 1.4% since reporting and currently trades at $184.32.
Read our full, actionable report on Nvidia here, it’s free for active Edge members.
Penguin Solutions (NASDAQ:PENG)
Based in the US, Penguin Solutions (NASDAQ:PENG) is a diversified semiconductor company offering memory, digital, and LED products.
Penguin Solutions reported revenues of $337.9 million, up 8.6% year on year. This number lagged analysts' expectations by 1.3%. Aside from that, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but a slight miss of analysts’ revenue estimates.
Penguin Solutions had the weakest performance against analyst estimates among its peers. The stock is down 19.5% since reporting and currently trades at $21.82.
Read our full, actionable report on Penguin Solutions here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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