Q2 Earnings Outperformers: Western Digital (NASDAQ:WDC) And The Rest Of The Semiconductors Stocks
Looking back on semiconductors stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Western Digital (NASDAQ:WDC) 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, 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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 4.4% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data, and semiconductors stocks have had a rough stretch. On average, share prices are down 6.6% since the latest earnings results.
Western Digital (NASDAQ:WDC)
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Western Digital reported revenues of $3.76 billion, up 40.9% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a significant improvement in its gross margin and an impressive beat of analysts’ EPS estimates.
“Our fourth quarter and fiscal year 2024 results are reflective of the diverse and innovative portfolio we have developed in alignment with our strategic roadmap. Together, with the structural changes we have made to strengthen our operations, we are benefitting from the broad recovery we are seeing across our end markets and structurally improving through-cycle profitability for both Flash and HDD,” said David Goeckeler, Western Digital CEO.
The stock is down 5.6% since reporting and currently trades at $63.29.
Is now the time to buy Western Digital? Access our full analysis of the earnings results here, it’s free.
Best 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 $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a significant improvement in its gross margin.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.5% since reporting. It currently trades at $5.36.
Is now the time to buy Himax? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $124.1 million, down 34.7% year on year, falling short of analysts’ expectations by 4.7%. It was a disappointing quarter as it posted underwhelming revenue guidance for the next quarter and a decline in its operating margin.
As expected, the stock is down 22.7% since the results and currently trades at $42.45.
Read our full analysis of Lattice Semiconductor’s results here.
Lam Research (NASDAQ:LRCX)
Founded in 1980 by David Lam, who pioneered semiconductor etching technology, Lam Research (NASDAQ:LCRX) is one of the leading providers of the wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $3.87 billion, up 20.7% year on year. This result topped analysts’ expectations by 1%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a meaningful improvement in its operating margin.
The stock is down 16.6% since reporting and currently trades at $770.13.
Read our full, actionable report on Lam Research here, it’s free.
Broadcom (NASDAQ:AVGO)
Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate that spans wireless, networking, data storage, and industrial end markets along with an infrastructure software business focused on mainframes and cybersecurity.
Broadcom reported revenues of $13.07 billion, up 47.3% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also produced a decent beat of analysts’ EPS estimates but underwhelming revenue guidance for the next quarter.
The stock is up 3.7% since reporting and currently trades at $158.68.
Read our full, actionable report on Broadcom here, it’s free.
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