The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Semtech (NASDAQ: SMTC) and the rest of the semiconductor manufacturing stocks fared in Q3.

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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.

In light of this news, share prices of the companies have held steady as they are up 1.5% on average since the latest earnings results.

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 exceeded analysts’ expectations by 2%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

"We are very pleased to report broad-based growth across each of our end markets, and particularly in data center, where we project AI-driven product demand to be a long-term and transformational growth engine for Semtech. Our results validate that our customers and target markets are moving toward us and highlight the effectiveness of our initiatives to drive market share gain and SAM expansion," said Hong Hou, Semtech's president and chief executive officer.

Interestingly, the stock is up 24% since reporting and currently trades at $66.62.

Is now the time to buy Semtech? Access our full analysis of the earnings results 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.

Weakest Q3: 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 $807.7 million, down 9.1% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ adjusted operating income estimates.

Entegris delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $106.57.

Read our full analysis of Entegris’s results here.

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 $207.9 million, up 21.2% year on year. This result surpassed analysts’ expectations by 3.8%. It was a very strong quarter as it also logged a significant improvement in its inventory levels and a solid beat of analysts’ EPS estimates.

The stock is down 2.1% since reporting and currently trades at $42.89.

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

Applied Materials (NASDAQ: AMAT)

Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Applied Materials reported revenues of $7.05 billion, up 4.8% year on year. This print surpassed analysts’ expectations by 1.1%. Zooming out, it was a mixed quarter as it also recorded a solid beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.

The stock is down 9% since reporting and currently trades at $169.26.

Read our full, actionable report on Applied Materials 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.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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