The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how processors and graphics chips stocks fared in Q3, starting with Qualcomm (NASDAQ: QCOM).
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 8.7% since the latest earnings results.
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. This print exceeded analysts’ expectations by 4.6%. 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.
Unsurprisingly, the stock is down 4.2% since reporting and currently trades at $165.80.
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, outperforming analysts’ expectations by 1.9%. 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 9.4% since reporting. It currently trades at $85.89.
Is now the time to buy Qorvo? 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 14% since the results and currently trades at $26.44.
Read our full analysis of Allegro MicroSystems’s results here.
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 print surpassed analysts’ expectations by 5.6%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ revenue estimates and revenue guidance for next quarter beating analysts’ expectations.
AMD achieved the biggest analyst estimates beat among its peers. The stock is down 13.7% since reporting and currently trades at $215.70.
Read our full, actionable report on AMD here, it’s free for active Edge members.
Intel (NASDAQ: INTC)
Inventor of the x86 processor that powered decades of technological innovation in PCs, data centers, and numerous other markets, Intel (NASDAQ: INTC) is a leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $13.65 billion, up 2.8% year on year. This number beat analysts’ expectations by 3.7%. It was a strong quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 5.6% since reporting and currently trades at $40.27.
Read our full, actionable report on Intel here, it’s free for active Edge members.
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% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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