Chip stocks dive on bad earnings news


Weaker-than-expected guidance from Broadcom, Altera, RF Micro, and STMicroelectronics has fueled a general selloff in chip stocks (SOXX -3.5%). Companies with strong mobile and/or telecom infrastructure exposure are seeing an outsized share of the damage.

The numbers call into question the strength of year-end demand from consumer electronics, enterprise hardware, and telecom equipment firms, and make a recent Wells Fargo downgrade of the sector look smart.

Notable decliners (aside from the reporting companies): CRUS -6%. SWKS -7.2%. TQNT -6.7%. AMD -4.1%. QCOM -2.4%. AMCC -4.4%. INVN -4.1%. FSL -5.5%. LSI -4.6%. NXPI -4.8%.CAVM -5.1%. ATML -5.2%. AVGO -4.2%. SIMO -3.8%  MXIM -3.2%.

Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG

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Comments (12)
  • bmwr1200c
    , contributor
    Comments (423) | Send Message
     
    2 to 4 % drop is not a Dive, the heading made me think that qcom dropped about 25 % or so
    23 Oct 2013, 10:25 AM Reply Like
  • Macnor
    , contributor
    Comments (122) | Send Message
     
    Agree
    Standing by for buying more stocks though
    23 Oct 2013, 01:34 PM Reply Like
  • Sirvasq
    , contributor
    Comments (331) | Send Message
     
    I think it's a laughable over-reaction and grabbed calls in 7 names which all are starting to recover. Time will tell.
    23 Oct 2013, 10:29 AM Reply Like
  • Esekla
    , contributor
    Comments (4469) | Send Message
     
    Yes, but that's just today's move, and possibly just the beginning. INVN is 10% off its highs. Even though I'm long term bullish on the stock, I've been telling followers that the price was getting ahead of itself in the wake of all the analyst pushing, and in view of the macro situation. http://seekingalpha.co...
    23 Oct 2013, 10:31 AM Reply Like
  • scorpion.bullfrog
    , contributor
    Comments (91) | Send Message
     
    Yeah, I guess humanity is just gonna stop buying cell phones. Sell!!! It's over!
    23 Oct 2013, 10:41 AM Reply Like
  • Withermania
    , contributor
    Comments (54) | Send Message
     
    Avago....buy that puppy, far more diversified than others.
    23 Oct 2013, 11:54 AM Reply Like
  • Withermania
    , contributor
    Comments (54) | Send Message
     
    Buy avago.... The most diversified semiconductor company...strong fiber optic demand..and having trouble keeping up with demand in the mobile space. Goldman conviction buy list. Get some
    23 Oct 2013, 11:57 AM Reply Like
  • millsy1
    , contributor
    Comments (164) | Send Message
     
    $tqnt and avago only 2 companies producing filters, tqnt is up alot this year and earnings after bell. If they beat and guide well then i would buy with 2 hands. Time will tell.
    23 Oct 2013, 12:19 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3595) | Send Message
     
    FYI, LSI announces earnings after the close today. Lately they've been beating their guidance. (Though that doesn't always correspond to a positive stock price movement.)
    23 Oct 2013, 01:53 PM Reply Like
  • wrscomncents
    , contributor
    Comments (1051) | Send Message
     
    That's for sure. Just look at amd.
    23 Oct 2013, 02:31 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3595) | Send Message
     
    From $4.10 all the way to $3 before rebounding. Pretty painful for AMD longs. :/ (I'm one of them, but I keep using strategies like selling ITM calls to mitigate losses on dips.) The market can be quite fickle. :/

     

    Looks like this earnings release had almost no effect on LSI's share price.
    24 Oct 2013, 04:49 PM Reply Like
  • wrscomncents
    , contributor
    Comments (1051) | Send Message
     
    I don't like to hold into earnings so I was out. I did however get back in after I saw the ridiculous drop. When I saw the premarket price drop I thought they must have lost a bundle. When I saw their numbers I just scratched my head and got back in. There are some things that I just can't figure out.
    24 Oct 2013, 07:02 PM Reply Like
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