Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Intel (NASDAQ: INTC) 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 0.5% below.
Luckily, processors and graphics chips stocks have performed well with share prices up 13.9% on average 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 $12.86 billion, flat year on year. This print exceeded analysts’ expectations by 7.8%. Despite the top-line beat, it was still a mixed quarter for the company with a significant improvement in its inventory levels but a miss of analysts’ adjusted operating income estimates.
“Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency,” said Lip-Bu Tan, Intel CEO.
Intel scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 63.6% since reporting and currently trades at $36.98.
Is now the time to buy Intel? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: 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 $818.8 million, down 7.7% year on year, outperforming analysts’ expectations by 5.3%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 5.9% since reporting. It currently trades at $89.55.
Is now the time to buy Qorvo? Access our full analysis of the earnings results 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, falling short of analysts’ expectations by 1.3%. It was a mixed quarter as it posted a significant improvement in its inventory levels but a slight miss of analysts’ revenue estimates.
Penguin Solutions delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 11.5% since the results and currently trades at $23.85.
Read our full analysis of Penguin Solutions’s results here.
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 $15.95 billion, up 22% year on year. This result was in line with analysts’ expectations. Overall, it was a strong quarter as it also put up a meaningful improvement in its inventory levels and revenue guidance for next quarter topping analysts’ expectations.
The stock is up 10.3% since reporting and currently trades at $337.50.
Read our full, actionable report on Broadcom here, it’s free for active Edge members.
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 $124 million, flat year on year. This number met analysts’ expectations. Zooming out, it was a mixed quarter as it failed to impress in some other areas of the business.
The stock is up 47.5% since reporting and currently trades at $71.90.
Read our full, actionable report on Lattice Semiconductor 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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