Reflecting On Processors and Graphics Chips Stocks’ Q1 Earnings: Allegro MicroSystems (NASDAQ:ALGM)
Wrapping up Q1 earnings, we look at the numbers and key takeaways for the processors and graphics chips stocks, including Allegro MicroSystems (NASDAQ:ALGM) 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 4.7% 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, but processors and graphics chips stocks have performed well, with the share prices up 13.3% on average since the previous earnings results.
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 $240.6 million, down 10.7% year on year, exceeding analysts' expectations by 2.4%. Despite the top-line beat, it was a weaker quarter overall for the company with underwhelming revenue guidance for the next quarter and a decline in its operating margin.
“Continued strong momentum in e-Mobility drove record fiscal year 2024 sales to more than $1 billion and record non-GAAP earnings per share of $1.35. We also achieved a record level of design wins of more than $1 billion. I would like to thank the entire Allegro team for their contributions which enabled us to achieve these significant milestones,” said Vineet Nargolwala, President and CEO of Allegro.
The stock is up 9.6% since reporting and currently trades at $32.20.
Read our full report on Allegro MicroSystems here, 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%. 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 pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 35.6% since reporting. It currently trades at $128.60.
Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it's free.
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.
Lattice Semiconductor posted the slowest revenue growth in the group. As expected, the stock is down 20.8% since the results and currently trades at $60.90.
Read our full analysis of Lattice Semiconductor's results here.
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 $941 million, up 48.7% year on year, surpassing analysts' expectations by 1.6%. Taking a step back, it was a solid quarter for the company with a significant improvement in its gross margin and an impressive beat of analysts' EPS estimates.
The stock is up 14.4% since reporting and currently trades at $127.91.
Read our full, actionable report on Qorvo here, it's free.
SMART (NASDAQ:SGH)
Based in the US, SMART Global Holdings (NASDAQ:SGH) is a diversified semiconductor company offering memory, digital, and LED products.
SMART reported revenues of $300.6 million, down 12.7% year on year, in line with analysts' expectations. Taking a step back, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts' EPS estimates.
The stock is up 27.7% since reporting and currently trades at $29.65.
Read our full, actionable report on SMART here, it's free.
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