Looking back on processors and graphics chips stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Allegro MicroSystems (NASDAQ: ALGM) 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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.

Thankfully, share prices of the companies have been resilient as they are up 7.9% on average since the latest earnings results.

Allegro MicroSystems (NASDAQ: ALGM)

The result of a spinoff from Sanken in Japan, Allegro MicroSystems (NASDAQ: ALGM) is a designer of power management chips and distance sensors used in electric vehicles and data centers.

Allegro MicroSystems reported revenues of $203.4 million, up 21.9% year on year. This print exceeded analysts’ expectations by 2.8%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.

“We delivered strong first quarter results, with sales of over $203 million, up 22% year-over-year, and led by growth in both e-Mobility and Industrial and Other, increasing 31% and 50% year-over-year, respectively. Non-GAAP EPS was $0.09, increasing nearly 3x year-over-year, demonstrating the significant operating leverage in our business model,” said Mike Doogue, President and CEO of Allegro.

Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $30.92.

Read our full report on Allegro MicroSystems here, it’s free.

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 very strong quarter with a beat of analysts’ EPS and adjusted operating income estimates.

The market seems content with the results as the stock is up 3.9% since reporting. It currently trades at $87.85.

Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: 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, exceeding analysts’ expectations by 7.8%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.

Interestingly, the stock is up 10.6% since the results and currently trades at $25.01.

Read our full analysis of Intel’s results here.

AMD (NASDAQ: AMD)

Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.

AMD reported revenues of $7.69 billion, up 31.7% year on year. This number surpassed analysts’ expectations by 3.4%. Aside from that, it was a mixed quarter as it also logged a significant improvement in its inventory levels but revenue guidance for next quarter meeting analysts’ expectations.

The stock is down 8.3% since reporting and currently trades at $159.98.

Read our full, actionable report on AMD here, it’s free.

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 $46.74 billion, up 55.6% year on year. This print met analysts’ expectations. More broadly, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

Nvidia achieved the fastest revenue growth among its peers. The stock is down 5.6% since reporting and currently trades at $171.35.

Read our full, actionable report on Nvidia here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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