Upcoming Semiconductor Plays (NVDA, AMD, INTC, QCOM)

[Shadowstars]

I didn’t see any updated topic in regards to any of the semiconductor stocks so I decided to make one here.

Some of the big semiconductor tickers I am looking at in this discussion are as follows.

Don’t have time to comment on everything I want to say at the moment so I will slowly be updating this over the course of the next few days.

Also reason why I am looking into them now is that earnings is coming up soon for them.

However the tickers I plan to cover are as follows:

NVDA (Nvidia) (2/22/23)
AMD (Advanced Micro Devices) (1/31/23)
INTC (Intel)
QCOM (Qualcomm) (2/2/23)

Of these four, INTC just recently had their earnings for Q4 2022.

INTC Earnings:

So far we see that INTC dropped nearly 10% in AH (will have to see how the markets open up tomorrow). A lot of the drop could be due to a few factors.

My thoughts for the drop are as follows:

1). They had a pretty big miss in regards to their top line figures for this recent quarter in regards to EPS/Rev.
2). Their Q1 Future Guidance offers a very bleak outlook as they revise down heavily.
3). Greater than anticipated slowdown in the PC market.

Excerpt here from Computer Weekly:

The PC market has experienced its largest decline ever, according to analyst Gartner. Preliminary results by Gartner shows that worldwide PC shipments totalled 65.3 million units in the fourth quarter of 2022, a 28.5% decrease from the fourth quarter of 2021.

Gartner said that this figure represents the largest quarterly shipment decline since it began tracking the PC market in the mid-1990s. Gartner’s previous market data also showed poor sales of new PCs. For the year, PC shipments reached 286.2 million units in 2022, a 16.2% decrease from 2021.

Now there are also a few other things to consider. I am not sure as to how large of an impact.

4). Lack of progress on Intel Arc GPUs. Intel introduced the idea of them launching their own GPU line/division with the Arc/Alchemist back in Q2 2021. Since their official launch in Q2 2022, the GPU launch has been pretty awful. Lots of bad reviews stemming from not only bad quality, terrible drivers, terrible support, and overall lack of optimization. Any notions of Intel being able to take any market share away from the two top dogs of AMD/NVDA have gone absolutely down the drain and even though Intel was aiming for the low/budget range for GPUs where AMD/NVDA don’t really offer much of a solution, sales for the cards have been abysmal.

More thoughts and information to come. Just wanted to jot down a few things right now while I had a little bit of time and had the ideas fresh on my mind before I forget some of it.

[Sejit]

I completely forgot Intel even had a line-up of non-integrated GPUs until I listened to their earnings call.
Between Intel and Microsoft with the research from Gartner (and other sources) it’s been anticipated for a little while now that these companies would be having a difficult time moving the bulk of their inventory. So, we get the rippling effect of not just poor revenue from Intel, but the whole chain is slowing since they have to get through their inventory before ordering more. And selling the old is a bit difficult when everyone wants the new.

Microsoft reported a substantial drop in new Windows licenses sold and Steam’s monthly revenue has been dwindling. Crypto is not going to be propping up many GPU sales, either.

I am expecting a miss from AMD, but I suspect they’ll still fair better than Intel did. AMD’s data center has been strong along with their integrated division. Though I hear their latest CPU launch wasn’t particularly great.

Nvidia I am suspicious about. Looking into the EVGA snafu and remarks from companies like ASRock which dropped Nvidia a while back, the company is essentially making itself look better by making it harder for their third-parties to turn a profit through higher costs and suspect MSRPs. There’s also a lot of rumor that they’re sitting on a lot of low/mid-range, older stock they can’t move. Granted their latest stuff sells instantly, but trophies only get a company so far.

If I remember right, MU had some nasty earnings in December as well.

I’m definitely bearish on semiconductor through 2023 here, but also looking at it as an opportunity to get a good price on something for a long position at some point.

Intel is looking like it might take a while before it can be a real competitor again; I believe they’re been using 2025 as a goalpost. AMD is almost guaranteed to show growth slow down if not outright shrinkage from last year’s records. How much of that is priced in is a mystery. From Intel’s relatively tame drop, I feel like a decent miss was priced in, but then they came out and revealed just how bad it was. Nvidia and the rest of semi will be a similar story, I think. Lots of misses from the sellers with the carry-on effect to misses on the fabs.