The end of an earnings season can be a great time to assess how companies are handling the current business environment and discover new stocks. Let’s take a look at how Nvidia (NASDAQ:NVDA) and the rest of the processors and graphics chips stocks fared in Q4.
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 Q4; on average, revenues beat analyst consensus estimates by 2.1% while next quarter’s revenue guidance was 3.9% below 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 12.7% on average since the previous earnings results.
Best Q4: 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 $22.1 billion, up 265% year on year, topping analyst expectations by 7.6%. It was a stunning quarter for the company, with a meaningful revenue beat, strong gross margin improvement, and EPS outperformance vs. Wall Street’s estimates. Guidance for the next quarter was also good, with revenue, gross margin, and implied operating profit coming in ahead of expectations.
“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” said Jensen Huang, founder and CEO of NVIDIA.
Nvidia scored the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 33.7% since the results and currently trades at $902.39.
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 $1.07 billion, up 44.5% year on year, outperforming analyst expectations by 7.1%. It was an impressive quarter for the company, with a significant improvement in its inventory levels and a strong beat of analysts’ EPS estimates.
The stock is up 14.4% since the results and currently trades at $114.15.
Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $170.6 million, down 3% year on year, falling short of analyst expectations by 3.3%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts’ revenue estimates.
Lattice Semiconductor had the weakest performance against analyst estimates in the group. The stock is up 10.4% since the results and currently trades at $78.34.
Read our full analysis of Lattice Semiconductor’s results here.
AMD (NASDAQ:AMD)
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 $6.17 billion, up 10.2% year on year, in line with analyst expectations. It was a slower quarter for the company, with underwhelming revenue guidance for the next quarter and a miss of analysts’ EPS estimates.
The stock is up 6.5% since the results and currently trades at $183.24.
Read our full, actionable report on AMD here, it’s free.
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 the leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $15.41 billion, up 9.7% year on year, surpassing analyst expectations by 1.5%. It was a mixed quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts’ EPS estimates. However, its revenue guidance for next quarter missed analysts’ expectations
The stock is down 10.2% since the results and currently trades at $44.55.
Read our full, actionable report on Intel here, it’s free.
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