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 KLA Corporation (NASDAQ: KLAC) and the rest of the semiconductor manufacturing stocks fared in Q1.

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 mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 2.9% below.

Luckily, semiconductor manufacturing stocks have performed well with share prices up 21% on average since the latest earnings results.

KLA Corporation (NASDAQ: KLAC)

Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.

KLA Corporation reported revenues of $3.06 billion, up 29.8% year on year. This print exceeded analysts’ expectations by 1.8%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.

Interestingly, the stock is up 32.9% since reporting and currently trades at $934.74.

We think KLA Corporation is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q1: 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 $171.4 million, up 1.6% year on year, outperforming analysts’ expectations by 0.9%. The business had a strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.

The market seems happy with the results as the stock is up 25.4% since reporting. It currently trades at $35.20.

Is now the time to buy FormFactor? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Photronics (NASDAQ: PLAB)

Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.

Photronics reported revenues of $211 million, down 2.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ EPS estimates.

As expected, the stock is down 5.4% since the results and currently trades at $19.

Read our full analysis of Photronics’s results here.

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 $251.1 million, up 21.8% year on year. This result was in line with analysts’ expectations. It was a strong quarter as it also recorded a significant improvement in its inventory levels and a solid beat of analysts’ adjusted operating income estimates.

The stock is up 23.5% since reporting and currently trades at $47.93.

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

Nova (NASDAQ: NVMI)

Headquartered in Israel, Nova (NASDAQ: NVMI) is a provider of quality control systems used in semiconductor manufacturing.

Nova reported revenues of $213.4 million, up 50.5% year on year. This number topped analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EPS estimates.

The stock is up 35.6% since reporting and currently trades at $273.25.

Read our full, actionable report on Nova 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), 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 for 2025.

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

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