As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the semiconductor manufacturing industry, including Marvell Technology (NASDAQ: MRVL) 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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was in line.
Luckily, semiconductor manufacturing stocks have performed well with share prices up 22% on average since the latest earnings results.
Weakest Q2: 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 $2.01 billion, up 57.6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations and revenue in line with analysts’ estimates.
"Marvell delivered record revenue of $2.006 billion in the second quarter – a 58% year-over-year increase – and we expect continued growth into the third quarter, accompanied by operating margin and earnings per share expansion," said Matt Murphy, Marvell's Chairman and CEO.
Marvell Technology scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 11.3% since reporting and currently trades at $86.
Is now the time to buy Marvell Technology? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Amkor (NASDAQ: AMKR)
Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ: AMKR) provides outsourced packaging and testing for semiconductors.
Amkor reported revenues of $1.51 billion, up 3.4% year on year, outperforming analysts’ expectations by 6.3%. The business had a stunning quarter with a beat of analysts’ EPS and adjusted operating income estimates.
The market seems happy with the results as the stock is up 32.3% since reporting. It currently trades at $28.10.
Is now the time to buy Amkor? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $195.8 million, flat year on year, exceeding analysts’ expectations by 3.4%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS and adjusted operating income estimates.
Interestingly, the stock is up 10.8% since the results and currently trades at $38.13.
Read our full analysis of FormFactor’s results here.
KLA Corporation (NASDAQ: KLAC)
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
KLA Corporation reported revenues of $3.17 billion, up 23.6% year on year. This print topped analysts’ expectations by 3%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS and adjusted operating income estimates.
The stock is up 13.1% since reporting and currently trades at $995.
Read our full, actionable report on KLA Corporation here, it’s free for active Edge members.
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 $7.30 billion, up 7.7% year on year. This number beat analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
The stock is up 11.8% since reporting and currently trades at $210.44.
Read our full, actionable report on Applied Materials here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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