As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the semiconductor manufacturing industry, including Nova (NASDAQ: NVMI) 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 24.1% on average since the latest earnings results.
Nova (NASDAQ: NVMI)
Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.
Nova reported revenues of $220 million, up 40.2% year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and a beat of analysts’ EPS estimates.
"We are proud to report another quarter of record revenue, with top-line performance landing at the high end of our guidance range and earnings results that meaningfully outpaced our profit outlook," said Gaby Waisman, President and CEO.
Interestingly, the stock is up 20.8% since reporting and currently trades at $311.50.
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 and adjusted operating income estimates.
The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $84.33.
Is now the time to buy IPG Photonics? Access our full analysis of the earnings results here, it’s free.
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 and adjusted operating income estimates.
Interestingly, the stock is up 4.2% since the results and currently trades at $35.85.
Read our full analysis of FormFactor’s results here.
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 recorded a beat of analysts’ EPS and adjusted operating income estimates.
The stock is up 39.3% since reporting and currently trades at $29.60.
Read our full, actionable report on Amkor here, it’s free.
Lam Research (NASDAQ: LRCX)
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $5.17 billion, up 33.6% year on year. This print surpassed analysts’ expectations by 3.3%. It was a very strong quarter as it also logged a significant improvement in its inventory levels and a beat of analysts’ EPS estimates.
The stock is up 27.6% since reporting and currently trades at $126.54.
Read our full, actionable report on Lam Research 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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