As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the semiconductor manufacturing industry, including KLA Corporation (NASDAQ: KLAC) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.
Luckily, semiconductor manufacturing stocks have performed well with share prices up 37.5% on average since the latest earnings results.
KLA Corporation (NASDAQ: KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $3.17 billion, up 23.6% year on year. This print exceeded analysts’ expectations by 3%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
"KLA delivered strong across-the-board results for the June quarter including generating record quarterly free cash flow. These results reflect the unique and compelling opportunity within semiconductor capital equipment for KLA's continued role in enabling and supporting the AI infrastructure buildout," said Rick Wallace, president and CEO of KLA Corporation.
Interestingly, the stock is up 29.2% since reporting and currently trades at $1,137.
Best Q2: IPG Photonics (NASDAQ: IPGP)
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ: IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $250.7 million, down 2.7% year on year, outperforming analysts’ expectations by 9.4%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 15.3% since reporting. It currently trades at $89.49.
Is now the time to buy IPG Photonics? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: FormFactor (NASDAQ: FORM)
With customers across the foundry and fabless markets, FormFactor (NASDAQ: FORM) is a US-based provider of test and measurement technologies for semiconductors.
FormFactor reported revenues of $195.8 million, flat year on year, exceeding analysts’ expectations by 3.4%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 23.2% since the results and currently trades at $42.41.
Read our full analysis of FormFactor’s results here.
Entegris (NASDAQ: ENTG)
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Entegris reported revenues of $792.4 million, down 2.5% year on year. This print topped analysts’ expectations by 3.8%. Aside from that, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is up 8% since reporting and currently trades at $100.44.
Read our full, actionable report on Entegris here, it’s free for active Edge members.
Amkor (NASDAQ: AMKR)
Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ: AMKR) provides outsourced packaging and testing for semiconductors.
Amkor reported revenues of $1.51 billion, up 3.4% year on year. This number beat analysts’ expectations by 6.3%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 54.4% since reporting and currently trades at $32.80.
Read our full, actionable report on Amkor here, it’s free for active Edge members.
Market Update
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 thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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