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 Q1. Today, we are looking at processors and graphics chips stocks, starting with Lattice Semiconductor (NASDAQ: LSCC).
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 strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was 0.5% below.
Luckily, processors and graphics chips stocks have performed well with share prices up 23.9% on average since the latest earnings results.
Weakest Q1: 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 $120.2 million, down 14.7% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with an increase in its inventory levels and a slight miss of analysts’ adjusted operating income estimates.
Ford Tamer, Chief Executive Officer, said, "The first quarter of 2025 developed as expected, with sequential revenue growth, a record level of design wins, and a further expansion of our operating margins. Revenue and design win growth are being led by new applications, notably in generative AI in the datacenter, robotics in industrial, in-cabin and ADAS in automotive, AR/VR in consumer, security, including post-quantum cryptography, and far edge AI for lower power applications. While we are encouraged by our progress, we are monitoring the market environment, along with the broader industry, as it could have an impact on our outlook. "
The stock is down 1.2% since reporting and currently trades at $52.42.
Read our full report on Lattice Semiconductor here, it’s free.
Best Q1: Penguin Solutions (NASDAQ: PENG)
Based in the US, Penguin Solutions (NASDAQ: PENG) is a diversified semiconductor company offering memory, digital, and LED products.
Penguin Solutions reported revenues of $365.5 million, up 28.3% year on year, outperforming analysts’ expectations by 6.1%. The business had a stunning quarter with a significant improvement in its inventory levels and a solid beat of analysts’ EPS estimates.
Penguin Solutions scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 13% since reporting. It currently trades at $20.40.
Is now the time to buy Penguin Solutions? Access our full analysis of the earnings results here, it’s free.
Broadcom (NASDAQ: AVGO)
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.
Broadcom reported revenues of $15 billion, up 20.2% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a narrow beat of analysts’ adjusted operating income estimates but an increase in its inventory levels.
Broadcom delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 3.7% since the results and currently trades at $269.59.
Read our full analysis of Broadcom’s results here.
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 $192.8 million, down 19.9% year on year. This print beat analysts’ expectations by 4.3%. Overall, it was a very strong quarter as it also recorded a significant improvement in its inventory levels and an impressive beat of analysts’ EPS estimates.
Allegro MicroSystems had the slowest revenue growth among its peers. The stock is up 91% since reporting and currently trades at $35.70.
Read our full, actionable report on Allegro MicroSystems 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 a leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $12.67 billion, flat year on year. This number surpassed analysts’ expectations by 2.6%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EPS estimates but an increase in its inventory levels.
The stock is up 1.9% since reporting and currently trades at $21.88.
Read our full, actionable report on Intel here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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