Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at AMD (NASDAQ: AMD) and the best and worst performers in the processors and graphics chips industry.

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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 12,447% above.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.5% since the latest earnings results.

AMD (NASDAQ: AMD)

Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.

AMD reported revenues of $9.25 billion, up 35.6% year on year. This print exceeded analysts’ expectations by 5.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and revenue guidance for next quarter beating analysts’ expectations.

"We delivered an outstanding quarter, with record revenue and profitability reflecting broad based demand for our high-performance EPYC and Ryzen processors and Instinct AI accelerators," said Dr. Lisa Su, AMD chair and CEO.

AMD scored the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.9% since reporting and currently trades at $215.25.

We think AMD is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Best Q3: Qorvo (NASDAQ: QRVO)

Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.

Qorvo reported revenues of $1.06 billion, up 1.1% year on year, outperforming analysts’ expectations by 1.9%. The business had an exceptional quarter with a significant improvement in its inventory levels and revenue guidance for next quarter exceeding analysts’ expectations.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 9% since reporting. It currently trades at $86.27.

Is now the time to buy Qorvo? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: 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 $214.3 million, up 14.4% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a mixed quarter as it posted EPS in line with analysts’ estimates.

As expected, the stock is down 10.6% since the results and currently trades at $27.47.

Read our full analysis of Allegro MicroSystems’s results here.

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 $133.3 million, up 4.9% year on year. This print was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a significant improvement in its inventory levels but a miss of analysts’ adjusted operating income estimates.

The stock is up 7.1% since reporting and currently trades at $76.53.

Read our full, actionable report on Lattice Semiconductor here, it’s free for active Edge members.

Broadcom (NASDAQ: AVGO)

Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ: AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.

Broadcom reported revenues of $18.02 billion, up 28.2% year on year. This result surpassed analysts’ expectations by 3%. It was a very strong quarter as it also logged a significant improvement in its inventory levels and revenue guidance for next quarter beating analysts’ expectations.

The stock is down 13.8% since reporting and currently trades at $350.35.

Read our full, actionable report on Broadcom 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.

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