Q3 Earnings Highlights: Teradyne (NASDAQ:TER) Vs The Rest Of The Semiconductor Manufacturing Stocks

January 23, 2025 at 04:02 AM EST

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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 Teradyne (NASDAQ: TER) 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.

Thankfully, share prices of the companies have been resilient as they are up 8.3% on average since the latest earnings results.

Teradyne (NASDAQ: TER)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ: TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Teradyne reported revenues of $737.3 million, up 4.8% year on year. This print exceeded analysts’ expectations by 3%. 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.

“Semiconductor Test continues to perform better than planned on record Memory revenue driven by High Bandwidth Memory (HBM) and compute demand for AI applications,” said Teradyne CEO, Greg Smith.

Interestingly, the stock is up 8.2% since reporting and currently trades at $134.79.

Is now the time to buy Teradyne? 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 29.2% since reporting. It currently trades at $124.

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.

Entegris delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $107.19.

Read our full analysis of Entegris’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 $236.8 million, up 17.9% year on year. This number beat analysts’ expectations by 2%. It was an exceptional quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 41.3% since reporting and currently trades at $75.95.

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 $179 million, up 38.9% year on year. This print topped analysts’ expectations by 4.1%. Overall, it was a very strong quarter as it also logged a significant improvement in its inventory levels and revenue guidance for next quarter beating analysts’ expectations.

Nova delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 38.2% since reporting and currently trades at $264.17.

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

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

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

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