Chip Stocks Rally on Strong Earnings and Easing Geopolitical Tensions

AMD jumps 9% in premarket trading as global chip stocks rally after earnings and geopolitics lift sector

ASML shares jump as U.S. could reportedly exclude allies from China chip controls Shares of global semiconductor firms rallied on Wednesday as they were boosted by some positive earnings in the sector and a report of potentially less severe U.S. export restrictions on China. AMD was among the morning's big winners with shares up more than 9% in U.S. premarket trading after the company reported a top and bottom line beat in its second-quarter financial report. AMD saw strong growth in its data center business, driven by sales of its graphics processing units (GPUs) which are used to train artificial intelligence models.

Semiconductor Stocks Set For Strongest Day In 5 Months As Chip Export Concerns Subside: Top Wednesday Movers - Advanced Micro Devices (NASDAQ:AMD), ASML Holding (NASDAQ:ASML)

Semiconductor stocks soared, marking their best session since February. U.S. eased fears of restrictive chip export rules to China. Semiconductor stocks experienced their best session since February on Wednesday, buoyed by strong quarterly earnings and less concerning developments regarding chip exports to China. The iShares Semiconductor ETF SOXX and the VanEck Semiconductor ETF SMH surged by 5.0% and 6.1%, respectively, by 12:30 p.m. ET, marking their most substantial gains since Feb. 22, 2024. Biden Administration Rethinks Chip Curbs Reuters reported this morning that the Biden administration is set to introduce a new regulation next month, which will extend U.S. authority to restrict the export of semiconductor manufacturing equipment from certain foreign countries to Chinese chipmakers. Nevertheless, shipments from key allies such as Japan, the Netherlands, and South Korea, which also export essential chipmaking equipment, will be exempted from this rule, thereby mitigating its impact, according to sources. Two weeks ago, news of potential new export restrictions to China caused the U.S.-listed shares of Dutch chipmaker giant AMSL Holding N.V. ASML to plummet by over 12% in one day. However, on Wednesday, AMSL shares rose more than 7% following news of their exemption from the export curbs. Tokyo Electron Ltd. TOELY, which would have also been heavily affected by the potential new restrictions, saw a 7.4% rally on Wednesday. Positive Results for AMD Shares of Advanced Micro Devices Inc. AMD surged over 5%, poised for their best session since late February, after reporting stronger-than-expected results for the last quarter. The Santa Clara, California-based chipmaker posted revenue of $5.84 billion, a 9% increase compared to the same quarter in 2023, surpassing estimates of $5.73 billion. Non-GAAP earnings per share were 69 cents, exceeding expectations of 67 cents and representing nearly a 19% rise from Q2 2024. "We achieved robust revenue and earnings growth in the second quarter, driven by record Data Center segment revenue," stated AMD Chair and CEO Dr. Lisa Su. "Our AI business continued to gain momentum, positioning us to deliver strong revenue growth in the second half of the year, led by demand for our Instinct, EPYC, and Ryzen processors. The rapid advancements in generative AI are fueling increased demand for computing power across all markets, creating significant growth opportunities as we provide leading AI solutions across our business." Wednesday's Top Chipmaker Performers The top-performing chipmaker stocks on Wednesday were: Read Next: Veteran Investor Boosts S&P 500 Price Targets: 'Magnificent 7 Stocks Will Remain Magnificent' Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

Nvidia, AMD help power chip surge as sector awaits Qualcomm, ARM results

Semiconductor stocks were sharply higher on Wednesday, boosted in part by gains in Nvidia (NASDAQ:NVDA) and AMD (AMD), as the sector awaited quarterly results from industry giants Qualcomm (NASDAQ:QCOM) and Arm Holdings (NASDAQ:ARM). Nvidia shares jumped more than 11.5% after Morgan Stanley re-added the semiconductor giant to its top picks list after the recent sell-off. Nvidia shares have sold off for several reasons, analyst Joseph Moore said, including: customer capital spending budgets and customer ROIs; competitive dynamics; export controls; supply chain concerns; and macro concerns, and market valuation compression. "Through those concerns, the earnings environment is likely to remain strong, for NVIDIA and for the whole AI complex," Moore wrote in an investor note. "Visibility will actually increase as demand moves from Hopper to Blackwell, as the constraint will shift back to silicon; H100 lead times are short, but H200 lead times are already long, and Blackwell should be even longer." Moore made no change to his Overweight rating and $144 price target on Nvidia. Additionally, it was reported that the U.S. government may exempt allies that export vital chip making parts -- including Japan, the Netherlands and South Korea -- from an upcoming export control expansion, reducing the impact of the rule. Nvidia is reportedly working on a new artificial chip for the Chinese market. Chip equipment makers, including ASML (NASDAQ:ASML), La Research (LRCX), Applied Materials (AMAT) and KLA Corp. (KLAC), rose on the back of the report, which may have spurred optimism across the entire sector. Lam Research rose more than 5% ahead of the release of its quarterly results. A consensus of analysts expect the company to earn $7.59 per share on $3.83B in revenue. AMD (AMD) shares rose 4.5% after the Dr. Lisa Su-led company reported better-than-expected second quarter results and guidance. However, analysts said they were unsure where the company goes from here. "On the positive, client and server CPU seems solid, and the modest raise to AI guidance appears to have been enough in the face of seemingly lowered expectations given the recent stock performance," said Bernstein Société Générale Group analysts, led by Stacy Rasgon, in a note. "However, we are starting to worry a bit about the state of the PC CPU channel (with overbuild in recent quarters and results/guidance suggestive that this trend could potentially be continuing)." Qualcomm (QCOM) shares gained more than 5% ahead of its own quarterly results, slated to be released after the close of trading. A consensus of analysts expect the company to earn $2.26 per share on $9.22B during its fiscal third quarter. Investors also bid up Arm Holdings ahead of its own quarterly release. A consensus of analysts expect the British chip design firm to earn $0.35 per share on $906.5M during its fiscal first quarter. Most other semiconductor stocks in the S&P 500 were higher on Wednesday, including Broadcom (AVGO) and Micron (MU), which gained 7% or more. Analog suppliers such as Texas Instruments (TXN), NXP Semiconductors (NXPI) and Analog Devices saw more modest gains. Intel (INTC) rose 1.5% after it was reported last night that the company could cut thousands of jobs as it looks to save on costs. Bucking the trend were Qorvo (QRVO) and Skyworks Solutions (SWKS), which fell 4.7% and 6.3%, respectively, after the pair released their own quarterly results on Tuesday. More on semiconductors Nvidia: It's Possible For The AI/Quality Compounder Momentum To Get More Extreme If Nvidia Doesn't Rally This Week, Major Bust Could Be Underway (Technical Analysis) Qualcomm: Diversification Strategy Underway Nvidia pops as Morgan Stanley moves back to top pick after sell off Nancy Pelosi buys more Nvidia, sells Microsoft

Good news from chip sector brightens sentiment

FRANKFURT (dpa-AFX) - Shares in the semiconductor sector, which have been battered recently, received some tailwind again on Wednesday. This was due to hopeful signals for the Chinese business of the supplier ASML as well as strong business figures from Samsung Electronics and AMD. These brightened the gloomy mood somewhat. On the German stock market, this was reflected in price gains by Infineon and Elmos Semiconductor, which rose by 2 and 1.4 percent respectively. The shares of optoelectronics specialist Aixtron gained 1.4 percent and those of microprocessor supplier Süss Microtec even 4.5 percent. In Paris, STMicro recorded gains of 1.7 percent. Samsung, an industry giant, increased its net profit to a level last seen in 2010. The South Koreans also want to double sales of chips for artificial intelligence applications. This caused the share price on the Seoul stock exchange to rise by 3.6 percent. It was the share's biggest daily gain since the beginning of June. On the Amsterdam stock exchange, ASML rose by 6.3 percent. The Reuters news agency had reported that the USA wanted to exempt chip industry suppliers from the Netherlands, Japan and South Korea from a next round of export restrictions to China. Concerns about trade restrictions in the global chip industry had recently weighed heavily on share prices. The previous evening after the US stock market closed, another semiconductor heavyweight, AMD, had impressed with its quarterly results. On Wednesday, the share price shot up by 9 percent in pre-market trading. The company intends to significantly increase its share of chips for artificial intelligence /bek/ajx/jha/.

Why chip stocks are on an absolute tear today | Business Insider India

Chip stocks are rallying across the board on Wednesday, driven by a big earnings beat from AMD and Morgan Stanley naming Nvidia as a top stock pick. AMD spiked as much as 11% before paring gains to around 5% higher. Nvidia surged 12% at intraday highs. Other stocks getting a lift included ASML (+11%), Qualcomm (+6%), and Samsung (+4%). AMD beat on both the top and bottom line, while also showing strong growth in its data-center business, driven by sales of GPUs, which are used to power AI technology. In addition to riding AMD's wave higher, Nvidia was renamed Morgan Stanley's top semiconductor stock pick. The firm said a recent sell-off in the stock "presents a good entry point as we continue to hear strong data points short term and long term, with overblown competitive concerns." The analysts said the stock has slid on concerns that will likely fade with time, like tighter customer capital spending budgets, a tough competitive landscape, export controls and supply chain concerns, among others. "Through those concerns, the earnings environment is likely to remain strong, for NVIDIA and for the whole AI complex," the analysts said. The semiconductor industry's strong rally is also driven by a report from Reuters that new U.S. restrictions on chip exports from foreign companies to China may not apply to U.S. allies like the Netherlands, Japan and South Korea.

AMD rebounds on earnings as rivals Intel, Nvidia also move up pre-market

Advanced Micro Devices (NASDAQ:AMD) surged nearly 8% during pre-market trading on Wednesday following a better-than-expected second quarter financial report. However, most analysts don't see enough yet to warrant it climbing back to the $180s it reached a few weeks ago. "On the positive, client and server CPU seems solid, and the modest raise to AI guidance appears to have been enough in the face of seemingly lowered expectations given the recent stock performance," said Bernstein Société Générale Group analysts, led by Stacy Rasgon, in a note. "However, we are starting to worry a bit about the state of the PC CPU channel (with overbuild in recent quarters and results/guidance suggestive that this trend could potentially be continuing)." Bernstein maintains its Market Perform rating on the stock, and increased its price target to $150 from $140. "The stock in the $140s bakes in very little incremental uplift in the DC GPU platform next year, and we see AMD working in a catch-up trade ahead of other AI names as we get more positive capex commentary," said Barclays analyst Tom O'Malley, in a note. Barclays maintains both its Neutral rating and $180 price target on AMD. Meanwhile, the analysts at KeyBanc Capital Markets believe AMD can return to the $200s where the stock was trading in March. They rate it Overweight with a $220 price target. "We are firm believers in AMD's revitalized product roadmap strategy, and product traction is compelling," said KeyBanc analyst John Vinh. "However, expectations for share gains and growth are high. We're concerned that any moderate downtick to expectations could add substantial risk to the stock based on valuation levels well above peers." Truist Securities is more bearish on the stock, maintaining its Hold rating and lowering the price target to $156 from $162. "Our longer-term concerns remain," said Truist analyst William Stein, in a note. "We see AMD's position in AI as likely confined versus Nvidia's (NASDAQ:NVDA) solutions, and we expect the X86 market will slowly come under pressure from new CPU competitors." Oppenheimer's Rick Schafer echoed this sentiment. "We remain cautious toward AMD's ability to deliver a profitable long-term business model as the second horse in the secularly declining PC market," Schafer noted. "We see financially and technologically stronger Nvidia and market-leading Intel (NASDAQ:INTC) strengthening their positions in both CPU and GPU, challenging AMD's revenue and GM trajectory." However, Jefferies finds that AMD's improved quarter and outlook provides it an opportunity to outperform competitors such as Intel. "To contrast, Intel is reportedly cutting 'thousands of jobs,' which adds to our belief that process ramps are not going well," said Jefferies analyst Blayne Curtis. "Overall, enough to settle AI concerns coupled with Server/Client strength that could become much more meaningful if Intel stumbles further." Intel inched up 2% during pre-market trading, while Nvidia was powering back, up 7%, which is enough to eliminate yesterday's losses. More on Advanced Micro Devices, Intel, etc. Advanced Micro Devices, Inc. (AMD) Q2 2024 Earnings Call Transcript AMD Regains Its Footing With Solid Q2 Report Advanced Micro Devices, Inc. 2024 Q2 - Results - Earnings Call Presentation Biggest stock movers today: AMD, ASML, and more Intel to eliminate thousands of jobs in cost-cutting effort - Bloomberg