Weekly Tech Update: AMD, MU, BRCM, NVDA, INTC, QCOM, TXN

The semiconductor industry was one of the strongest performing sectors in 2014, driven by the continued strength in personal, network and service provider communications, and increasing electronics adoption around the world. The Philadelphia Semiconductor Index (SOX) increased by approximately 30% in 2014, as compared to a 12% growth in the S&P 500 index. According to The Semiconductor Industry Association (SIA), the year-on-year global semiconductor sales increased for the nineteenth straight month in November, growing by 9.1%. SIA projects nearly double-digit growth in 2014, as semiconductor sales continue to be strong across the board, with nearly all regions and product categories exhibiting increases. However, its anticipates more moderate growth in 2015 and 2016. ^[1] Though the SOX declined marginally in the first week of January, the same has recovered since then and is currently trading around the $685 level.

Last week was quite eventful, with almost all semiconductor companies and their OEM partners unveiling a number of new products and technologies at CES 2015. Below is a weekly update for some of the technology companies that Trefis covers.

See Our Complete Analysis for These Companies Here

AMD

At CES 2015 last week, AMD (NYSE:AMD) and its technology partners announced the commercial availability of the world’s first FreeSync-enabled displays. The company also launched new APU, GPU and embedded products, showcasing breakthrough computing experiences for gaming enthusiasts as well as mainstream consumers. (Read Press Release) AMD’s stock price has declined by more than 30% in the last year. Last week, the stock traded between $2.60 – $2.70 (market cap of around $2 billion). Our valuation of $4 is at a more than 50% premium to the current market price. We forecast AMD to report $5.3 billion in revenue and estimate net income to turn positive for calendar year 2014. AMD will report its 2014 earnings on January 20.

Micron Technology

Micron Technology (NASDAQ:MU) reported its Q1 2015 earnings on January 6. (Read Our Earnings Article) At CES 2015, the company unveiled new SSDs and memory modules for its Crucial and Lexar brands. Micron saw a marginal decline (~5%) in its stock price last week. The company recovered some of its post-earnings losses in the last two trading days of the week. Our valuation of $33 for Micron is almost in line with the current market price, which translates into market cap of around $35 billion. For calendar 2015, we estimate Micron to report revenue and net income of around $20 billion and $4.2 billion, respectively. Our non-GAAP diluted EPS for calendar 2015 stands at $3.42, as compared to the market consensus of $3.73.

Broadcom

Broadcom (NASDAQ:BRCM) showcased a range of new consumer innovations, optimized to enhance connectivity in the home, on-the-go and on-the-road, at the 2015 CES last week. (Read Press Release) The company’s stock traded between $42 – $43. Our valuation of $41 for the company is only marginally lower than the current market price. Broadcom’s current market cap stands at around $23 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. The company is set to release its Q4 2014 earnings on January 29.

Nvidia

Nvidia (NASDAQ:NVDA) showcased two new automotive computers – Nvidia Drive PX and Nvidia Drive CX – in collaboration with its partners, at CES 2015 last week. (Read: Nvidia Adds Two High Powered Computing Solutions To Its Automotive Portfolio) French company Parrot, the first to bring sophisticated drones that are controlled by smartphones to the mass market, showcased its next generation drones using NVIDIA technology. (Read Press Releases)

Nvidia’s stock price traded around $20 last week, which translates into market cap of nearly $11 billion. Our $19.52 valuation for the company is almost in line with the current market price. We estimate Nvidia will report revenues of around $4.3 billion and net income in excess of $600 million for calendar year 2014.

Intel

Intel (NASDAQ:INTC) announced a number of technology advancements and initiatives aimed at accelerating computing into the next dimension, at CES 2015. The company introduced the full lineup of its 14 nm fifth generation core line of processors as well as its first 14nm 64-bit Atom chips. It showcased new wearable technology at the conference, the highlight being a new button-sized computing system designed for smart clothes and other wearables, called Curie. (Read: Intel Showcases New Wearable Technology At CES 2015)

Intel’s stock price hovered between $35 – $37 last week. The company has a market cap of nearly $180 billion. Our price estimate of $34 for Intel is slightly below the current market price. Intel is set to announce its Q4 2014 earnings on January 15. We expect it 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.

Qualcomm

At CES 2015, Qualcomm (NASDAQ:QCOM) showcased a range of new connected mobile computing experiences to enhance consumer experience on the go, in the home and within their vehicles. These included – two Qualcomm concept cars (in collaboration with Cadillac and Maserati), the world’s first delivery of 4K content with LTE Broadcast technology, and a new class of home WiFi connectivity. The company also announced investing $40 million into several promising Chinese companies and a strategic collaboration with Novartis for the clinical “Trials of The Future program”. (Read Press Releases)

Qualcomm’s stock traded between $73 and $74 last week. Our price estimate of $72 for the company is only marginally lower than the current market price. The company’s current market cap is around $125 billion. We expect Qualcomm to report revenue of around $28 billion and net income of $7 billion for calendar year 2014. For fiscal year 2015 (ended September), we forecast non-GAAP diluted EPS of $5.40 as compared to market consensus of $5.21.

Texas Instruments

Texas Instruments (NASDAQ:TXN) demonstrated its technology used in the newest and most sophisticated consumer devices, such as advanced driver assistance systems, smart homes and wearable technology at CES 2015 .The company, in collaboration with Ford, showcased an infotainment solution with improved performance for enhanced voice recognition and navigation, quality hands-free Bluetooth connectivity, Wi-Fi enabled software updates and enhanced driver interactivity. TI also showcased its voice-over-RF4CE TV remote control technology, in collaboration with Comcast, at CES 2015. (Read Press Releases) TV manufacturer, Hisense USA unveiled its latest HDTV set with laser projection using TI’s DLP technology.

Our valuation of $45 for TI is approximately 15% lower than the current market price. The company’s stock price traded between $53 and $54 last week, which translates into market cap of around $57 billion. We expect the company to report revenue and net income of $13.1 billion and $2.8 billion for 2014, respectively. Our GAAP diluted EPS forecast for TI stands at $2.59 while the market consensus is at $2.51. TI will report its Q4 2014 earnings on January 26.

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1. Global Semiconductor Sales Increase In October, Substantial Growth Projected for 2014, SIA, December 2, 2014 [↩]