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Nvidia Earnings Preview Plus Other Top Ranked Semiconductor Stocks
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Nvidia (NVDA - Free Report) has without a doubt been the stock to own in 2023. Thanks to the boom in Artificial Intelligence, Nvidia’s earnings and revenue estimates have absolutely skyrocketed. On Tuesday after the market closes, we will get a look inside the semiconductor giant when Nvidia reports its Q2 earnings.
Nvidia enjoys a Zacks Rank #1 (Strong Buy) rating and the Zacks Earnings ESP currently forecasts that it will beat earnings estimates by 2.39%. Analysts have set expectations high for Wednesday’s report, with earnings estimated at $2.06 per share, which will be a 304% YoY gain, and sales at $11 billion, or a 64.6% YoY increase.
During the Q1 report NVDA beat estimates by a huge margin, with earnings coming in 44% above estimates and sales 10.5%. Additionally, the stock rallied 24% in the week following and pushed it to a new all-time high. Can Nvidia pull off another big beat?
While Nvidia’s stock performance has been nothing short of spectacular this year, up 215% YTD, it has also been a top performing stock for the last decade. Over the last 10 years NVDA has compounded at an almost unbelievable 62.6% annually.
Image Source: Zacks Investment Research
Other Top Ranked Semi Stocks
Nvidia isn’t the only semiconductor stock out there worth owning though. Because of the explosion in AI and the massive computing power necessary, semiconductor companies throughout the supply chain are going to be critical for reaching demand. This huge demand should be a tailwind for their sector’s stock prices for years to come.
Applied Materials (AMAT - Free Report) is one of the world’s largest suppliers of equipment for the fabrication of semiconductors. Applied Materials’ silicon segment offers equipment for front-end operations in the semiconductor manufacturing process. Front-end processes involve the deposition or implantation of multiple thin layers of electronically conductive, semiconductive and insulating materials onto and within a silicon wafer with the help of photomasks (reticles) to give multiple copies of integrated circuit devices.
Applied Materials boasts a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions. Next quarter earnings estimates have been increased by 5.7% and FY23 earnings estimates have been upgraded by 3.4% over the last two months. EPS are projected to grow by 5.4% annually over the next 3-5 years.
Image Source: Zacks Investment Research
AMAT also has an incredible history of steady growth in sales and earnings. Over the last 20 years annual sales have grown from $8 billion to $26.5 billion, which is a CAGR of 6.2%. Over that same period EPS have expanded from $0.87 per share to $7.96 per share, which is a CAGR of 11.7%.
Image Source: Zacks Investment Research
Applied Materials is trading at a one year forward earnings multiple of 18.8x, which is below the industry average of 24.7x, and just above its 10-year median of 15.7x. Furthermore, AMAT pays a dividend yield of 0.9% and has raised the payment by an average of 6.5% annually over the last five years.
Image Source: Zacks Investment Research
Another semiconductor stock with a long history of success is Lam Research (LRCX - Free Report) . Lam Research is a leading semiconductor equipment company that designs and manufactures equipment used in the fabrication of integrated circuits. LRCX specializes in providing advanced solutions for the semiconductor industry, including etch, deposition, and cleaning processes. Lam Research's technology plays a crucial role in enabling the production of smaller, more powerful, and energy-efficient chips used in various electronic devices.
Lam Research is a Zacks Rank #1 (Strong Buy) stock, demonstrated by some strong earnings revisions over the last two months. Current quarter earnings estimates have been upgraded by 10.8% and FY23 estimates by 8.8%. Additionally, the company is expected to grow EPS by 6.2% annually over the next 3-5 years.
Image Source: Zacks Investment Research
Sales at Lam Research have grown from $936 million to $17.4 billion over the last twenty years, which is a CAGR of 15.7%. EPS have grown from $0.62 to $34.10 per share over the same period, which is a CAGR of 22.1%.
Image Source: Zacks Investment Research
LRCX is trading at a one year forward earnings multiple of 24.4x, which is right in line with the industry average and above its five-year median of 16.6x. Additionally, the company pays a dividend yield of 1.1% and has raised the dividend by an average of 11.9% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors have piled into Nvidia stock all year, and it doesn’t appear to be slowing. While some investors may be writing the move up to hype, the data leads me to think that Nvidia’s future business expectations are the real deal.
Investors should also note that they don’t only have to own Nvidia. There are a number of compelling semiconductor stocks in the market with exceptional histories of success, and strong near-term expectations.
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Nvidia Earnings Preview Plus Other Top Ranked Semiconductor Stocks
Nvidia (NVDA - Free Report) has without a doubt been the stock to own in 2023. Thanks to the boom in Artificial Intelligence, Nvidia’s earnings and revenue estimates have absolutely skyrocketed. On Tuesday after the market closes, we will get a look inside the semiconductor giant when Nvidia reports its Q2 earnings.
Nvidia enjoys a Zacks Rank #1 (Strong Buy) rating and the Zacks Earnings ESP currently forecasts that it will beat earnings estimates by 2.39%. Analysts have set expectations high for Wednesday’s report, with earnings estimated at $2.06 per share, which will be a 304% YoY gain, and sales at $11 billion, or a 64.6% YoY increase.
During the Q1 report NVDA beat estimates by a huge margin, with earnings coming in 44% above estimates and sales 10.5%. Additionally, the stock rallied 24% in the week following and pushed it to a new all-time high. Can Nvidia pull off another big beat?
While Nvidia’s stock performance has been nothing short of spectacular this year, up 215% YTD, it has also been a top performing stock for the last decade. Over the last 10 years NVDA has compounded at an almost unbelievable 62.6% annually.
Image Source: Zacks Investment Research
Other Top Ranked Semi Stocks
Nvidia isn’t the only semiconductor stock out there worth owning though. Because of the explosion in AI and the massive computing power necessary, semiconductor companies throughout the supply chain are going to be critical for reaching demand. This huge demand should be a tailwind for their sector’s stock prices for years to come.
Applied Materials (AMAT - Free Report) is one of the world’s largest suppliers of equipment for the fabrication of semiconductors. Applied Materials’ silicon segment offers equipment for front-end operations in the semiconductor manufacturing process. Front-end processes involve the deposition or implantation of multiple thin layers of electronically conductive, semiconductive and insulating materials onto and within a silicon wafer with the help of photomasks (reticles) to give multiple copies of integrated circuit devices.
Applied Materials boasts a Zacks Rank #2 (Buy) rating, indicating upward trending earnings revisions. Next quarter earnings estimates have been increased by 5.7% and FY23 earnings estimates have been upgraded by 3.4% over the last two months. EPS are projected to grow by 5.4% annually over the next 3-5 years.
Image Source: Zacks Investment Research
AMAT also has an incredible history of steady growth in sales and earnings. Over the last 20 years annual sales have grown from $8 billion to $26.5 billion, which is a CAGR of 6.2%. Over that same period EPS have expanded from $0.87 per share to $7.96 per share, which is a CAGR of 11.7%.
Image Source: Zacks Investment Research
Applied Materials is trading at a one year forward earnings multiple of 18.8x, which is below the industry average of 24.7x, and just above its 10-year median of 15.7x. Furthermore, AMAT pays a dividend yield of 0.9% and has raised the payment by an average of 6.5% annually over the last five years.
Image Source: Zacks Investment Research
Another semiconductor stock with a long history of success is Lam Research (LRCX - Free Report) . Lam Research is a leading semiconductor equipment company that designs and manufactures equipment used in the fabrication of integrated circuits. LRCX specializes in providing advanced solutions for the semiconductor industry, including etch, deposition, and cleaning processes. Lam Research's technology plays a crucial role in enabling the production of smaller, more powerful, and energy-efficient chips used in various electronic devices.
Lam Research is a Zacks Rank #1 (Strong Buy) stock, demonstrated by some strong earnings revisions over the last two months. Current quarter earnings estimates have been upgraded by 10.8% and FY23 estimates by 8.8%. Additionally, the company is expected to grow EPS by 6.2% annually over the next 3-5 years.
Image Source: Zacks Investment Research
Sales at Lam Research have grown from $936 million to $17.4 billion over the last twenty years, which is a CAGR of 15.7%. EPS have grown from $0.62 to $34.10 per share over the same period, which is a CAGR of 22.1%.
Image Source: Zacks Investment Research
LRCX is trading at a one year forward earnings multiple of 24.4x, which is right in line with the industry average and above its five-year median of 16.6x. Additionally, the company pays a dividend yield of 1.1% and has raised the dividend by an average of 11.9% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Investors have piled into Nvidia stock all year, and it doesn’t appear to be slowing. While some investors may be writing the move up to hype, the data leads me to think that Nvidia’s future business expectations are the real deal.
Investors should also note that they don’t only have to own Nvidia. There are a number of compelling semiconductor stocks in the market with exceptional histories of success, and strong near-term expectations.