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 analog semiconductors stocks, starting with Power Integrations (NASDAQ: POWI).
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 3.2% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5% since the latest earnings results.
Power Integrations (NASDAQ: POWI)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ: POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Power Integrations reported revenues of $115.8 million, down 7.7% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Unsurprisingly, the stock is down 2.6% since reporting and currently trades at $64.73.
Is now the time to buy Power Integrations? Access our full analysis of the earnings results here, it’s free.
Best Q3: Impinj (NASDAQ: PI)
Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ: PI) is a maker of radio-frequency identification (RFID) hardware and software.
Impinj reported revenues of $95.2 million, up 46.4% year on year, outperforming analysts’ expectations by 2.5%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Impinj delivered the 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 31.7% since reporting. It currently trades at $151.
Is now the time to buy Impinj? Access our full analysis of the earnings results here, it’s free.
Slowest Q3: Vishay Intertechnology (NYSE: VSH)
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE: VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $735.4 million, down 13.9% year on year, falling short of analysts’ expectations by 1.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.
Vishay Intertechnology delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 5.3% since the results and currently trades at $17.95.
Read our full analysis of Vishay Intertechnology’s results here.
ON Semiconductor (NASDAQ: ON)
Spun out of Motorola in 1999 and built through a series of acquisitions, ON Semiconductor (NASDAQ: ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.
ON Semiconductor reported revenues of $1.76 billion, down 19.2% year on year. This number surpassed analysts’ expectations by 0.5%. More broadly, it was a mixed quarter as it also produced a decent beat of analysts’ adjusted operating income estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is down 7.6% since reporting and currently trades at $65.80.
Read our full, actionable report on ON Semiconductor here, it’s free.
Texas Instruments (NASDAQ: TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $4.15 billion, down 8.4% year on year. This print surpassed analysts’ expectations by 0.8%. It was a strong quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.
The stock is down 1.4% since reporting and currently trades at $191.31.
Read our full, actionable report on Texas Instruments here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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