Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Applied Materials (NASDAQ:AMAT) and its peers.
The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.
The 14 semiconductor manufacturing stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Applied Materials (NASDAQ:AMAT)
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ:AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Applied Materials reported revenues of $7.05 billion, up 4.8% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
“Applied Materials’ technology leadership and strong execution drove record Q4 and fiscal 2024 performance, our fifth consecutive year of growth,” said Gary Dickerson, President and CEO.
Unsurprisingly, the stock is down 10.1% since reporting and currently trades at $167.30.
Is now the time to buy Applied Materials? Access our full analysis of the earnings results here, it’s free.
Best Q3: Marvell Technology (NASDAQ:MRVL)
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Marvell Technology reported revenues of $1.52 billion, up 6.9% year on year, outperforming analysts’ expectations by 4%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 21.2% since reporting. It currently trades at $116.34.
Is now the time to buy Marvell Technology? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Entegris (NASDAQ:ENTG)
With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Entegris reported revenues of $807.7 million, down 9.1% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Entegris delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.5% since the results and currently trades at $101.31.
Read our full analysis of Entegris’s results here.
Photronics (NASDAQ:PLAB)
Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Photronics reported revenues of $222.6 million, down 2.1% year on year. This number surpassed analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EPS estimates and revenue guidance for next quarter slightly topping analysts’ expectations.
The stock is down 4.5% since reporting and currently trades at $24.18.
Read our full, actionable report on Photronics here, it’s free.
FormFactor (NASDAQ:FORM)
With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors.
FormFactor reported revenues of $207.9 million, up 21.2% year on year. This result beat analysts’ expectations by 3.8%. It was a very strong quarter as it also recorded a significant improvement in its inventory levels and a solid beat of analysts’ EPS estimates.
The stock is up 9.4% since reporting and currently trades at $47.90.
Read our full, actionable report on FormFactor 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 has 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 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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