As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the analog semiconductors industry, including Texas Instruments (NASDAQ:TXN) and its peers.
Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.
The 15 analog semiconductors stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.9% above.
Luckily, analog semiconductors stocks have performed well with share prices up 13.9% on average since the latest earnings results.
Texas Instruments (NASDAQ:TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $4.07 billion, up 11.1% year on year. This print exceeded analysts’ expectations by 4.1%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 26.2% since reporting and currently trades at $191.62.
Is now the time to buy Texas Instruments? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $215.1 million, up 3.7% year on year, outperforming analysts’ expectations by 2.4%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 14.1% since reporting. It currently trades at $8.51.
Is now the time to buy Himax? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Vishay Intertechnology (NYSE:VSH)
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Vishay Intertechnology reported revenues of $715.2 million, down 4.2% year on year, falling short of analysts’ expectations by 0.6%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.
Vishay Intertechnology delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 9.6% since the results and currently trades at $14.72.
Read our full analysis of Vishay Intertechnology’s results here.
Analog Devices (NASDAQ:ADI)
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Analog Devices reported revenues of $2.64 billion, up 22.3% year on year. This print beat analysts’ expectations by 5.2%. Overall, it was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is down 1.2% since reporting and currently trades at $219.30.
Read our full, actionable report on Analog Devices here, it’s free.
Microchip Technology (NASDAQ:MCHP)
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Microchip Technology reported revenues of $970.5 million, down 26.8% year on year. This result surpassed analysts’ expectations by 1%. It was a decent quarter as it also logged a solid beat of analysts’ EPS estimates.
Microchip Technology had the slowest revenue growth among its peers. The stock is up 32.3% since reporting and currently trades at $64.99.
Read our full, actionable report on Microchip Technology 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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