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In a huge week for technology earnings top semiconductor companies report second quarter results. Big names include semiconductors Texas Instruments $TXN, Advanced Micro Devices $AMD, Qualcomm $QCOM and Intel $INTC



Technology Chips

With Trade Wars being front and center and President Trump threatening to put tariffs on everything made in China a note from Cowen & Co. analyst Matthew Ramsay on Friday:

“Despite the high exposure for nearly all of our coverage universe into China, we believe in digital and analog semiconductors Chinese buyers have essentially zero sources of competitive domestic supply — at least in the medium term.”

He added that a trade war between the U.S. and China would:

“irreparably damage global competitiveness for several important Chinese tech giants (smartphone, wireless infrastructure and cloud vendors in particular) that rely often on single or dual-sourced critical semiconductor components from U.S. suppliers.”

In the current context of winners and losers in a trade meltdown some points to consider. The latest consensus estimates and a brief preview are provided below. BE sure to check for any changes. 

Texas Instruments Inc. (NASDAQ: $TXN) Reports After Close Tuesday

Analysts consensus is $1.32 in earnings per share (EPS) and $3.97 billion in revenue 

 

What Analysts Will Be Watching

$TXN is seen benefitting from the high-margin & high-growth areas of the analog and embedded processing markets which has seen growth for the last four quarters. While TI's increasing exposure to the industrial and automotive markets is positive, weakness in communications equipment and personal electronics markets are weak areas.

TI is driven by strong performance in almost all the product lines. Of note after $LRCX warnings last quarter is that $TXN enjoys a cost advantage on every wafer that it builds using the 300-millimeter technology against 200-millimeter technology. This competitive advantage is expected to drive growth with consensus for the analog segment revenues at $2.44 billion.

Shares Closed Friday at $115.48  with the stock in a 52-week range of $79.60 to $120.75.

Advanced Micro Devices Inc. (NASDAQ: $AMD) Reports After Close Wednesday

Analysts consensus is $0.13 in earnings per share (EPS) and $1.72 billion in revenue 

 

What Analysts Will Be Watching

The PC market has been a battleground between AMD's Ryzen CPUs and Intel's 8th-gen Core CPUs that deliver sizable performance gains relative to comparable 7th-gen chips. $AMD has upped the ante by launching second-gen Ryzen CPUs that improve on the performance of last year's and are priced fairly aggressively.

AMD Rizen Rollout

Last quarter $AMD launched 4 second-gen Ryzen desktop CPUs. The two most powerful chips in the lineup, the Ryzen 7 2700X and 2700, each contain 8 cores and can run 16 simultaneous threads, and are priced at $329 and $299, respectively. Two less-powerful chips, the Ryzen 5 2600X and 2600, each contain 6 cores and support 12 threads, and are priced at $229 and $199, respectively. While the products are only modestly cheaper than comparable 8th-gen Intel CPUs Intel's "K" CPUs don't ship with cooling fans/heatsinks  AMD's new Ryzen CPUs are bundled with quality coolers (average $35 value).

Shares Closed Friday at $16.69  with the stock in a 52-week range of $9.04 to $17.34.

Qualcomm Inc. (NASDAQ: $QCOM) Reports After Close Wednesday

Analysts consensus is $9.59 in earnings per share (EPS) and $32.19 billion in revenue 

 

What Analysts Will Be Watching

$QCOM has been among the headlines this quarter with the failed Broadcom takeover attempt and a legal dispute with major customer Apple which has hurt its results in recent quarters. Apple has refused to pay technology licensing fees to Qualcomm until courts decide on who owns want.  China could also block its proposed acquisition of NXP Semiconductors $NXPI. China's Ministry of Commerce gave a negative preliminary review of the Qualcomm-NXP deal. If politics dominate then after the U.S. stopping Broadcom there is a likely tit for tat at play. Lets not forget the Trade War.

Shares Closed Friday at $58.96  with the stock in a 52-week range of $48.56 to $69.28

 

Intel Corp. (NASDAQ: $INTC) Reports After Close Thursday

Analysts consensus is $0.96 in earnings per share (EPS) and $16.76 billion in revenue 

 

What Analysts Will Be Watching

in the midst of looking for a new CEO after Brian Krzanich resigned in disgrace — makes its NAND memory chips that were designed in the U.S. at a factory in China. So far the company has not made any comments on how the trade war may or may not affect its business but some analysts have tried to assuage investors jitters by noting that Chinese buyers of semiconductors still (at least for now) rely heavily on their U.S. suppliers.

Data Center and PC Segments

Intel’s focus in the conference call on data center, cloud, self-driving car and Internet of Things (IoT) are the key growth drivers for the first quarter guidance. Management expect data grow the mid-teens range, the Data Center Group (“DCG”) is a hot segment as cloud usage explodes. PC segments likely to decline in low-single digits. $INTC is also expected to benefit from strength in on-premise and hybrid cloud build-outs.

Mobileye

Intel’s acquisition of MobilEye enables it to offer a wide range for self-driving vehicles, cameras, in-car networking, sensor-chips, roadway mapping, cloud software, machine learning and data management. Intel is now in a position to compete with NVidia in the autonomous car technology market. Intel has also been a long-time supplier to Alphabet’s Waymo division and has partnerships with BMW, Nissan, Volkswagen AG, and Ferrari. 

Shares Closed Friday at $51.83  with the stock in a 52-week range of $34.38 to $57.60

More Chips Reporting This Week

 

Other semicondoctors to watch reporting earnings this week include MKS Instruments $MKSI on Tuesday and Entegris $ENTG on Thursday.

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