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As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q3. Today we are looking at the processors and graphics chips stocks, starting with Broadcom (NASDAQ:AVGO).
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 solid Q3; on average, revenues beat analyst consensus estimates by 3.4% while next quarter's revenue guidance was in line with consensus. Investors abandoned cash-burning companies to buy stocks with higher margins of safety, but processors and graphics chips stocks held their ground better than others, with the share prices up 20.6% on average since the previous earnings results.
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 $9.30 billion, up 4.3% year on year, in line with analyst expectations. It was a slower quarter for the company, with full-year revenue guidance missing analysts' expectations and a decline in its gross margin.
"Broadcom's fiscal year 2023 revenue grew 8% year-over-year to a record $35.8 billion, driven by investments in accelerators and network connectivity for AI by hyperscalers," said Hock Tan, President and CEO of
The stock is up 20.1% since the results and currently trades at $1,105.
Is now the time to buy Broadcom? Access our full analysis of the earnings results here, it's free.
Best Q3: 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 $18.12 billion, up 206% year on year, outperforming analyst expectations by 12.5%. It was a stunning quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.