SWKS - AMD Nvidia Intel lead semis higher in wake of tepid results from TI

2023-04-26 12:21:33 ET

AMD ( NASDAQ: AMD ), Nvidia ( NVDA ) and Intel ( INTC ) led the semiconductor industry higher on Wednesday even as investors digested Texas Instruments ( NASDAQ: TXN ) "ho hum" first-quarter and tepid guidance.

AMD ( AMD ) and Nvidia ( NVDA ) gained around 4% , while Intel ( INTC ) tacked on 2.8% in mid-day trading. No company specific news drove the gains, however investors may have been relieved by strong cloud results from Microsoft ( MSFT ) and Google ( GOOG ) ( GOOGL ). The three chip makers provide CPUs and GPUs to be used in data centers.

Texas Instruments ( TXN ) fell around 1.5% as Wall Street analysts reacted to its quarterly results and guidance, with some saying the results were "about as expected."

Mizuho Securities analyst Vijay Rakesh trimmed his estimates and maintained his neutral rating on Texas Instruments ( TXN ), citing "broad weakness" across all end-markets excluding automotive and a tick down in gross margins to 65.4%, while inventories rose 19% quarter-over-quarter.

"While [Texas Instruments] leads the industry with market share and solid execution, we believe TXN faces challenges with peak margins, high inventories, and a macro slowdown noted by [gross margins] with potential slowing in China/US into [the second-half of 2023]," Rakesh wrote in a note.

Micron Technology ( NASDAQ: MU ) shares rose more than 4% on Wednesday as a top U.S. lobbying group expressed concerns about China's review into the company.

At a media roundtable, the American Chamber of Commerce in China said the lack of "real evidence" showing Micron ( MU ) caused a vulnerability in China may mean that other companies or industries could also be targeted.

Last month, the Cyberspace Administration of China said it launched a review of Micron ( MU ) products sold in the country.

Micron ( MU ) also benefited as South Korean memory chipmaker SK Hynix issued a record operating loss for the first-quarter, but said the memory market should improve in the second half of the year.

SK Hynix added that it is continuing to cut production to meet the slowdown, though it did not give specific details.

ASML ( NASDAQ: ASML ) shares rose around 1.4% as the company's CEO Peter Wennink said he thought China would develop its own semiconductor equipment but that it was "essential" that the company keeps having access to the country.

Lam Research ( LRCX ), Applied Materials ( AMAT ) and KLA Corp. ( KLAC ), which compete with ASML in the chip equipment market, also rose in mid-day trading.

Most other chip stocks rose on Wednesday, including Qualcomm ( QCOM ), NXP Semiconductors ( NXPI ), ON Semiconductor ( ON ) and Skyworks Solutions ( SWKS ).

More on semiconductors

• European Union finalizes $47B Chips Act to compete with U.S., Asia
• 'Weak' IT spending in March may have impacted chips: UBS
• Taiwan Semiconductor said to push back on controversial CHIPs Act requirements

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