In a recent analysis of first-quarter earnings for companies manufacturing processors and graphics chips, Intel (NASDAQ: INTC) emerged as one of the worst performers, while Nvidia (NASDAQ: NVDA) stood out as one of the best. The demand for CPUs and graphics chips remains high due to trends related to 5G, the Internet of Things, autonomous driving, and high-performance computing. However, semiconductor companies, including digital chip makers, are subject to cyclical fluctuations driven by supply and demand imbalances and exposure to product cycles in PCs and smartphones.
Intel, the leading manufacturer of computer processors and graphics chips, reported revenue of $12.72 billion, up 8.6% year-over-year, but slightly below analysts’ expectations. The company’s gross margin showed improvement, but its revenue guidance for the next quarter was disappointing. Intel’s stock performed poorly compared to analyst estimates, dropping 11.7% since the results were released.
Nvidia, a designer of chips used in gaming, PCs, data centers, and automotive applications, had an exceptional first quarter. The company reported revenue of $26.04 billion, up 262% year-over-year, surpassing analysts’ expectations by 6%. Nvidia also showed significant improvement in its gross margin and beat analysts’ EPS estimates. The stock has risen by 27.2% since the results were announced.
On the other hand, Lattice Semiconductor, a semiconductor designer specializing in customer-programmable chips, had a weak first quarter. The company reported revenue of $140.8 million, down 23.6% from the previous year, and its stock has dropped by 24.7% since the results were released.
Qualcomm, a fabless manufacturer of wireless technology chips, posted revenue of $9.39 billion, up 1.2% year-over-year, matching analyst expectations. The company beat analysts’ EPS estimates but experienced an increase in inventory levels. Qualcomm’s stock has risen by 20.9% since the results were announced.
Qorvo, a designer and manufacturer of RF chips, reported revenue of $941 million, up 48.7% year-over-year, beating analyst expectations by 1.6%. The company showed significant improvement in its gross margin and beat analysts’ EPS estimates. Qorvo’s stock has increased by 5.1% since the results were released.
Overall, the market remains volatile due to mixed signals, but processor and graphics chip stocks have generally remained stable. Despite concerns about inflation, many growth stocks have yet to reach their early 2021 valuations. Investors may want to consider the performance of companies like Intel, Nvidia, Lattice Semiconductor, Qualcomm, and Qorvo when making investment decisions in this sector.
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https://www.theglobeandmail.com/investing/markets/indices/TXCX/pressreleases/27139277/reflecting-on-processors-and-graphics-chips-stocks-q1-earnings-intel-nasdaqintc/
