Winners And Losers Of Q3: Intel (NASDAQ:INTC) Vs The Rest Of The Processors and Graphics Chips Stocks
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 processors and graphics chips stocks fared in Q3, starting with Intel (NASDAQ:INTC).
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 mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 4.4% below.
While some processors and graphics chips stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.6% 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 $13.28 billion, down 6.2% year on year. This print exceeded analysts’ expectations by 2.2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.
Intel Total Revenue
Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $19.65.
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 $35.08 billion, up 93.6% year on year, outperforming analysts’ expectations by 5.9%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Nvidia Total Revenue
Nvidia delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.7% since reporting. It currently trades at $136.21.
Based in the US, SMART Global Holdings (NASDAQ:SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $311.1 million, down 1.7% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
SMART delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $21.
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 $1.05 billion, down 5.2% year on year. This result surpassed analysts’ expectations by 1.8%. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but revenue guidance for next quarter missing analysts’ expectations.
The stock is down 29.5% since reporting and currently trades at $70.85.
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices or AMD (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
AMD reported revenues of $6.82 billion, up 17.6% year on year. This result beat analysts’ expectations by 1.6%. Taking a step back, it was a mixed quarter as it also logged a significant improvement in its inventory levels but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is down 27.2% since reporting and currently trades at $120.99.
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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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