Unpacking Q3 Earnings: Qualcomm (NASDAQ:QCOM) In The Context Of Other Processors and Graphics Chips Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Qualcomm (NASDAQ:QCOM) 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 a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 4.4% below.

In light of this news, share prices of the companies have held steady as they are up 2.3% on average 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 $10.24 billion, up 18.7% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $174.26.

We think Qualcomm is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q3: 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 $35.08 billion, up 93.6% year on year, outperforming analysts’ expectations by 5.9%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.

Nvidia delivered the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $146.35.

Is now the time to buy Nvidia? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: 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 $311.1 million, down 1.7% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.

SMART delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $21.

Read our full analysis of SMART’s results here.

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 $13.28 billion, down 6.2% year on year. This print topped analysts’ expectations by 2.2%. Taking a step back, it was a slower quarter as it logged a significant miss of analysts’ adjusted operating income and EPS estimates.

The stock is flat since reporting and currently trades at $21.53.

Read our full, actionable report on Intel here, it’s free.

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 $187.4 million, down 32% year on year. This result met analysts’ expectations. Aside from that, it was a slower quarter as it produced revenue guidance for next quarter missing analysts’ expectations.

The stock is up 9.4% since reporting and currently trades at $24.31.

Read our full, actionable report on Allegro MicroSystems here, it’s free.

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% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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