As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the processors and graphics chips industry, including Broadcom (NASDAQ:AVGO) 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 an ok Q1; on average, revenues beat analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 5% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and processors and graphics chips stocks have held roughly steady amidst all this, with share prices up 4.5% on average since the previous earnings results.
Broadcom (NASDAQ:AVGO) Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate that spans wireless, networking, data storage, and industrial end markets along with an infrastructure software business focused on mainframes and cybersecurity.
Broadcom reported revenues of $12.49 billion, up 43% year on year, topping analysts' expectations by 4%. It was a mixed quarter for the company, with a meaningful improvement in its inventory levels but a miss of analysts' EPS estimates.
"Broadcom's second quarter results were once again driven by AI demand and VMware. Revenue from our AI products was a record $3.1 billion during the quarter. Infrastructure software revenue accelerated as more enterprises adopted the VMware software stack to build their own private clouds," said Hock Tan, President and CEO of
The stock is up 19.1% since the results and currently trades at $1,778.4.
Is now the time to buy Broadcom? Find out by reading the original article on StockStory, it's free. Best Q1: Nvidia (NASDAQ:NVDA)Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Nvidia reported revenues of $26.04 billion, up 262% year on year, outperforming analysts' expectations by 6.1%. It was an exceptional quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
Nvidia achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 40% since the results and currently trades at $132.83.
Weakest Q1: 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 $140.8 million, down 23.6% year on year, in line with analysts' expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
The stock is down 20.7% since the results and currently trades at $60.99.
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 $9.39 billion, up 1.2% year on year, in line with analysts' expectations. It was a decent quarter for the company, with a solid beat of analysts' EPS estimates but an increase in its inventory levels.
The stock is up 32% since the results and currently trades at $216.76.
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 the leading manufacturer of computer processors and graphics chips.
Intel reported revenues of $12.72 billion, up 8.6% year on year, falling short of analysts' expectations by 0.4%. It was a decent quarter for the company, with a significant improvement in its gross margin but underwhelming revenue guidance for the next quarter.
Intel had the weakest performance against analyst estimates among its peers. The stock is down 13.8% since the results and currently trades at $30.32.
