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Nvidia, Qualcomm and Other Chip Stocks Mixed After AMD Earnings

Nvidia, Qualcomm and other chip stocks trade flat to lower after Advanced Micro Devices reports its seventh straight quarter of double-digit revenue growth.

Nvidia  (NVDA) - Get NVIDIA Corporation Report, Qualcomm  (QCOM) - Get QUALCOMM Incorporated Report and other chip stocks traded flat to lower Wednesday after Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report reported its seventh straight quarter of double-digit revenue growth thanks to broad-based PC, server, and game console strength.

Concerns that the likes of Tesla  (TSLA) - Get Tesla Inc Report and Apple  (AAPL) - Get Apple Inc. (AAPL) Report may be looking at additional production woes due to the ongoing global semiconductor shortage also failed to spark gains in chipmakers' shares. 

AMD after the closing bell on Tuesday reported net income of $710 million, or 58 cents a share, compared with $157 million, or 13 cents a share, a year ago. Adjusted earnings came to 63 cents a share. Revenue totaled $3.85 billion, up 99% from a year ago.

Looking ahead, AMD said it expects third-quarter revenue of roughly $4.1 billion, up about 46% year over year. Analysts are calling for revenue of $3.82 billion. For the full year 2021, AMD now expects revenue growth of about 60%, up from prior guidance of roughly 50%.

The surge in AMD’s revenue and earnings, driven by the ongoing global semiconductor shortage that has driven up both demand and prices for chips that go in everything from cars and refrigerators to children’s toys, wasn’t enough to lift other chip and graphics card makers.

Shares of Nvidia were up a moderate 0.2% at $192.47 in early trading Wednesday, while shares of Qualcomm, which will release its own second-quarter numbers after the closing bell Wednesday, were down 0.37% at $140.41. Taiwan Semiconductor’s  (TSM) - Get Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR Report American depositary receipts were up 1.18% at $114.88; shares of Texas Instruments  (TXN) - Get Texas Instruments Incorporated Report were up 0.16% at $185.42.

While some analysts have suggested a recovery in chip production and supply combined with a post-pandemic return to normal means the best has past for chipmakers, TheStreet’s Jim Cramer told Action Alerts PLUS senior analyst Jeff Marks last week that calls of a peak in the semiconductor sector may be premature.

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"Maybe these stocks are not as cyclical as we think and there's tremendous demand for them out of sync with the economy," Cramer said.

Noting that AMD and Nvidia, two Action Alerts PLUS holdings, are well off their highs, Cramer said it's time to "give a hard look to some of the stocks that are down."

Meantime, Apple  (AAPL) - Get Apple Inc. (AAPL) Report, which also is now a chipmaker, posted much stronger-than-expected third quarter earnings Tuesday as surging iPhone sales and a big comeback in China sales boosted the tech giant's top and bottom lines.

Apple's role in the semiconductor world is two-fold: It now makes chips for its own computers, reducing demand from its traditional third-party suppliers, though at the same time relies on other chipmakers and semiconductor fabricators to make chips and other components for its iPhones, which are expected to be a big revenue-driver through the second half of the year.

At last check, shares of Apple were down 1.58% at $144.44.

Jim Cramer: How Apple Headlines Impact Micron, Skyworks, Broadcom

Apple, AMD and Nvidia are holdings in the portfolio of Jim Cramer's Action Alerts PLUS investing club. Want to be alerted before Jim Cramer buys or sells Apple, AMD or NVDA? Learn more now.

Read more about the chip sector, the chip shortage and more of Cramer's investing ideas and insights over on Real Money.