Weekly Tech Notes: AMD, BRCM, INTC, NVDA, QCOM, TXN

Earlier this month, the Semiconductor Industry Association (SIA) reported that, at $87 billion (5.7% sequential and 8% annual growth), the global semiconductor sales outperformed the latest World Semiconductor Trade Statistics industry forecast in Q3 2014 and were the highest ever quarterly sales for the industry. ^[1] However, the calendar Q3 2014 earnings report have been mixed, with some participants experiencing a deceleration. Nevertheless, driven by the continued strength in personal computer, network and service provider communications, and increasing electronics adoption around the world, the semiconductor industry has been one of the strongest performing sectors in 2014. The Philadelphia Semiconductor Index (Sox) has outperformed the S&P 500 index so far this year.

Below is a weekly update for some of the technology companies that Trefis covers.See Our Complete Analysis for These Companies Here

AMD

Last week, AMD (NYSE:AMD) announced the addition of its first high performance system-on-chip (SoC), code-named Carrizo, and a mainstream SoC code-named “Carrizo-L” as part of its 2015 Mobile APU family. (Read: AMD Addresses New Mobile APUs & Slashes Price Of Existing Ones To Gain Back Lost PC Market Share) AMD’s stock price has been on a downhill trend since August 2014. However, last week, the stock increased marginally (~5%). Our valuation of $4 is at an approximate 50% premium to the current market price. The company’s current market cap is around $2 billion. We forecast AMD’s 2014 revenue to increase to $5.3 billion and net income to turn positive by year end. Our GAAP and non-GAAP diluted EPS estimates stand at $0.15 and $0.38, respectively.

Broadcom

Broadcom (NASDAQ:BRCM) announced a quarterly dividend of $0.12 per share, payable on December 15, 2014. The company’s stock has been on a uphill trend since it reported strong Q3 2014 earnings last month. Last week, Broadcom’s stock traded close to $42, which marks is just slightly above our valuation of $41 for the company. Broadcom’s current market cap stands at around $22.7 billion. Our 2014 revenue and net income estimates for the company stand at $8.4 billion and $660 million, respectively. Our non-GAAP diluted EPS forecast is $2.86, as compared to the market consensus of $2.92.

Intel

Intel (NASDAQ:INTC) hosted its annual investor meeting on November 20, where the company announced a 6 cent increase in its quarterly cash dividend (to 96 cents-per-share), in addition to providing a business outlook for fiscal 2015. (Read Press Release) Last week, Intel also unveiled silicon characterization results for its 1 to 32 Gbps high-speed SerDes on the 14nm process (Read Press Release), announced additional details of its fashion accessory MICA (Read Related Article) and introduced a new product lineup for the High Performance Computing (HPC) market. (Read Related Article)

Intel’s stock traded close to $36 last week. Our valuation of $34 (market cap of $165 billion) for the company is marginally lower than the current market price. We expect Intel to report revenue of around $53 billion and net income of $11 billion for 2014. We forecast non-GAAP diluted EPS of $2.38, which is above the market consensus of $2.18.

Nvidia

Last week, Nvidia (NASDAQ:NVDA) unveiled the world’s fastest accelerator for data analytics and scientific computing – the Tesla K80 dual-GPU accelerator. The company also announced that it is developing an enhanced version of PGI HPC compilers which will allow developers to quickly develop new applications or run Linux x86-based GPU-accelerated applications on IBM POWER CPU systems with minimal effort. (Read Press Releases)

Nvidia’s stock price gained marginally last week (~4%) and is now trading around $20.5, which translates into a market cap of nearly $11 billion. Our $19.50 valuation for the company is now slightly lower than the current market price. We estimate Nvidia will report revenues of around $4.3 billion and net income in excess of $600 million this year.

Qualcomm

Qualcomm (NASDAQ:QCOM) and Ericsson announced completing the world’s first inter-company interoperability testing of LTE Category 9 connectivity, last week. Separately, Qualcomm also introduced its fifth-generation LTE multimode solution, the Qualcomm Gobi 9×45 modem, and its second- generation Qualcomm RF360 Envelope Tracker, the QFE3100. (Read Press Releases) The company also confirmed its plan to sell chips for servers and is in talks with some customers to this end.

Qualcomm’s stock traded close to $71 (market cap of $118 billion) last week. Our price estimate of $74 for Qualcomm (market cap of 125 billion) is slightly above the current market price. We expect the company to report revenue of around $27 and net income of $7 billion. For fiscal year 2014 (ended September), we forecast non-GAAP diluted EPS of $5.24 as compared to market consensus of $5.23.

Texas Instruments

Last week, Texas Instruments (NASDAQ:TXN) unveiled two new fully differential amplifiers (FDAs) that provide DC-coupled applications with best-in-class AC performance to improve system capabilities and performance. The company also introduced the industry’s first fully integrated 10-Watt wireless charging receiver and corresponding transmitter. (Read Press Releases) TI’s stock traded around $52 last week. Our valuation of $45 for TI is approximately 15% lower than the current market price. We expect the company to report revenue and net income of $13.1 billion and $2.8 billion this year, respectively. Our GAAP diluted EPS forecast for TI stands at $2.59 while the market consensus is at $2.51.

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1. Global Semiconductor Industry Posts Highest-Ever Quarterly Sales, Semiconductor Industry Association, November 3, 2014 [↩]