Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at SMART (NASDAQ: SGH) and its peers.
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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was in line.
While some processors and graphics chips stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results.
Weakest Q3: SMART (NASDAQ: SGH)
Based in the US, SMART Global Holdings (NASDAQ: SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $311.1 million, down 1.7% year on year. This print fell short of analysts’ expectations by 4.3%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income and EPS estimates.
SMART delivered the weakest performance against analyst estimates of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $21.
Read our full report on SMART here, it’s free.
Best Q3: Qualcomm (NASDAQ: QCOM)
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ: QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Qualcomm reported revenues of $11.67 billion, up 17.5% year on year, outperforming analysts’ expectations by 6.7%. The business had an exceptional quarter with a significant improvement in its inventory levels and an impressive beat of analysts’ EPS estimates.
Qualcomm achieved the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 9.8% since reporting. It currently trades at $158.70.
Is now the time to buy Qualcomm? Access our full analysis of the earnings results here, it’s free.
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 $117.4 million, down 31.2% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
Lattice Semiconductor delivered the slowest revenue growth in the group. Interestingly, the stock is up 16.9% since the results and currently trades at $63.60.
Read our full analysis of Lattice Semiconductor’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 $177.9 million, down 30.2% year on year. This number beat analysts’ expectations by 1.4%. It was a strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a decent beat of analysts’ adjusted operating income estimates.
The stock is up 19.4% since reporting and currently trades at $27.30.
Read our full, actionable report on Allegro MicroSystems here, it’s free.
AMD (NASDAQ: AMD)
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
AMD reported revenues of $7.66 billion, up 24.2% year on year. This result surpassed analysts’ expectations by 1.5%. However, it was a mixed quarter as it failed to impress in some other areas of the business.
The stock is down 17.3% since reporting and currently trades at $98.88.
Read our full, actionable report on AMD here, it’s free.
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