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 processors and graphics chips stocks, starting with Qorvo (NASDAQ: QRVO).

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 8 processors and graphics chips stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was above.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.1% since the latest earnings results.

Best Q3: Qorvo (NASDAQ: QRVO)

Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.

Qorvo reported revenues of $1.06 billion, up 1.1% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was an exceptional quarter for the company with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

Bob Bruggeworth, president and chief executive officer of Qorvo, said, “In the September quarter, ACG supported our largest customer’s smartphone ramp while continuing to serve Android’s premium and flagship tiers. In HPA, we grew our D&A and infrastructure businesses while supporting a recently launched smartwatch with our power management ICs. In CSG, we consolidated our organizational structure to improve profitability and prioritize opportunities in automotive, industrial, enterprise, and other markets. In the December quarter, we expect year-over-year revenue growth and margin expansion, supported by strategic customers in mobile and D&A markets."

Qorvo delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 7% since reporting and currently trades at $88.18.

Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $11.27 billion, up 10% year on year, outperforming analysts’ expectations by 4.6%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $171.01.

Is now the time to buy Qualcomm? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $214.3 million, up 14.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a mixed quarter as it posted EPS in line with analysts’ estimates.

As expected, the stock is down 15.1% since the results and currently trades at $26.09.

Read our full analysis of Allegro MicroSystems’s results here.

Penguin Solutions (NASDAQ: PENG)

Based in the US, Penguin Solutions (NASDAQ: PENG) is a diversified semiconductor company offering memory, digital, and LED products.

Penguin Solutions reported revenues of $337.9 million, up 8.6% year on year. This number missed analysts’ expectations by 1.3%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but a slight miss of analysts’ revenue estimates.

Penguin Solutions had the weakest performance against analyst estimates among its peers. The stock is down 23.3% since reporting and currently trades at $20.80.

Read our full, actionable report on Penguin Solutions here, it’s free for active Edge members.

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 $9.25 billion, up 35.6% year on year. This result surpassed analysts’ expectations by 5.6%. It was a strong quarter as it also logged an impressive beat of analysts’ revenue estimates and revenue guidance for next quarter beating analysts’ expectations.

AMD scored the biggest analyst estimates beat among its peers. The stock is down 13.7% since reporting and currently trades at $215.80.

Read our full, actionable report on AMD here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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