Wrapping up Q2 earnings, we look at the numbers and key takeaways for the semiconductors stocks, including Micron (NASDAQ:MU) and its peers.
The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers, and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, the Internet of Things, and smart cars are creating the next wave of secular growth for the industry.
The 41 semiconductors stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.
Luckily, semiconductors stocks have performed well with share prices up 15.5% on average since the latest earnings results.
Micron (NASDAQ:MU)
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NYSE:MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Micron reported revenues of $9.30 billion, up 36.6% year on year. This print exceeded analysts’ expectations by 4.9%. Overall, it was a very strong quarter for the company with a significant improvement in its inventory levels and a beat of analysts’ EPS estimates.
“Micron delivered record revenue in fiscal Q3, driven by all-time-high DRAM revenue including nearly 50% sequential growth in HBM revenue. Data center revenue more than doubled year-over-year and reached a quarterly record, and consumer-oriented end markets had strong sequential growth,” said Sanjay Mehrotra, Chairman, President and CEO of Micron Technology.
Interestingly, the stock is up 33.2% since reporting and currently trades at $169.83.
Is now the time to buy Micron? Access our full analysis of the earnings results here, it’s free.
Best Q2: IPG Photonics (NASDAQ:IPGP)
Both a designer and manufacturer of its products, IPG Photonics (NASDAQ:IPGP) is a provider of high-performance fiber lasers used for cutting, welding, and processing raw materials.
IPG Photonics reported revenues of $250.7 million, down 2.7% year on year, outperforming analysts’ expectations by 9.4%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $84.33.
Is now the time to buy IPG Photonics? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Himax (NASDAQ:HIMX)
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Himax reported revenues of $214.8 million, down 10.4% year on year, exceeding analysts’ expectations by 1.3%. Still, it was a softer quarter as it posted EPS in line with analysts’ estimates and an increase in its inventory levels.
Interestingly, the stock is up 3% since the results and currently trades at $8.90.
Read our full analysis of Himax’s results here.
NXP Semiconductors (NASDAQ:NXPI)
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
NXP Semiconductors reported revenues of $2.93 billion, down 6.4% year on year. This print topped analysts’ expectations by 0.8%. Zooming out, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $226.52.
Read our full, actionable report on NXP Semiconductors here, it’s free.
Seagate Technology (NASDAQ:STX)
The developer of the original 5.25inch hard disk drive, Seagate (NASDAQ:STX) is a leading producer of data storage solutions, including hard drives and Solid State Drives (SSDs) used in PCs and data centers.
Seagate Technology reported revenues of $2.44 billion, up 29.5% year on year. This number beat analysts’ expectations by 0.6%. More broadly, it was a satisfactory quarter as it also recorded a significant improvement in its inventory levels but revenue guidance for next quarter missing analysts’ expectations significantly.
The stock is up 43% since reporting and currently trades at $218.59.
Read our full, actionable report on Seagate Technology here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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