As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at semiconductor manufacturing stocks, starting with Semtech (NASDAQ: SMTC).
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 14.1% on average since the latest earnings results.
Semtech (NASDAQ: SMTC)
A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.
Semtech reported revenues of $257.6 million, up 19.6% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with EPS in line with analysts’ estimates but an increase in its inventory levels.
Interestingly, the stock is up 18.6% since reporting and currently trades at $60.42.
Is now the time to buy Semtech? 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 and adjusted operating income estimates.
The market seems content with the results as the stock is up 2.4% since reporting. It currently trades at $79.47.
Is now the time to buy IPG Photonics? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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.
As expected, the stock is down 12.4% since the results and currently trades at $30.14.
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 number beat analysts’ expectations by 3%. Overall, it was a strong quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 9.7% since reporting and currently trades at $964.67.
Read our full, actionable report on KLA Corporation here, it’s free.
Amtech (NASDAQ: ASYS)
Focusing on the silicon carbide and power semiconductor sectors, Amtech Systems (NASDAQ: ASYS) produces the machinery and related chemicals needed for manufacturing semiconductors.
Amtech reported revenues of $19.56 million, down 23.1% year on year. This result topped analysts’ expectations by 15%. More broadly, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
Amtech delivered the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 108% since reporting and currently trades at $9.33.
Read our full, actionable report on Amtech 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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