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 semiconductors stocks, starting with Western Digital (NASDAQ: WDC).
The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers, and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, the Internet of Things, and smart cars are creating the next wave of secular growth for the industry.
The 41 semiconductors stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 2.4% below.
While some semiconductors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.3% since the latest earnings results.
Western Digital (NASDAQ: WDC)
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Western Digital reported revenues of $4.10 billion, up 48.9% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
“Western Digital’s performance in the fiscal first quarter demonstrates our commitment to operational excellence and disciplined capital investment as our focus on lasting quality and reliability, driven by industry leading innovation and a diversified portfolio, has allowed us to target the most attractive end markets to improve profitability,” said David Goeckeler, Western Digital CEO.
Unsurprisingly, the stock is down 2.1% since reporting and currently trades at $65.08.
Read our full report on Western Digital here, it’s free.
Best Q3: Marvell Technology (NASDAQ: MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 25.9% since reporting. It currently trades at $120.85.
Is now the time to buy Marvell Technology? 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.
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.
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 $127.1 million, down 33.9% year on year. This print was in line with analysts’ expectations. Aside from that, it was a slower quarter as it recorded revenue guidance for next quarter missing analysts’ expectations significantly and an increase in its inventory levels.
The stock is up 24.8% since reporting and currently trades at $64.99.
Read our full, actionable report on Lattice Semiconductor here, it’s free.
Semtech (NASDAQ: SMTC)
A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.
Semtech reported revenues of $236.8 million, up 17.9% year on year. This print beat analysts’ expectations by 2%. Overall, it was an exceptional quarter as it also put up a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 24% since reporting and currently trades at $66.62.
Read our full, actionable report on Semtech here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
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