Seeking Alpha

Xilinx, Juniper spark chip stock selloff

  • Among the year's best tech performers, chip stocks are selling off (SOXX -1.8%) on an up day for the Nasdaq following weak numbers from FPGA giant Xilinx (XLNX -14.5%).
  • Xilinx missed FQ1 revenue estimates by over $18M, and also guided for FQ2 revenue to be well below consensus. The company blamed the FQ1 shortfall on soft defense and wireless sales. BMO and BofA/Merrill have downgraded Xilinx; the former thinks Xilinx's 28nm share might be peaking.
  • Xilinx stated on its CC (transcript) the wireless weakness was mostly due to soft 28nm chip sales to Chinese 4G base station vendors; Chinese 4G rollouts have long been viewed as a catalyst for both Xilinx and Altera (ALTR -4.7%). Aerospace/defense sales were hurt by program timing issues.
  • Meanwhile, switch/router vendor Juniper offered light Q3 guidance to go with a Q2 beat. The company noted on its CC (transcript) "market dynamics" for U.S. carriers, including M&A activity, are affecting project rollouts.
  • Also: Analog/mixed-signal IC vendor Linear (LLTC -4.1%) is selling off in spite of beating FQ4 estimates and guiding in-line (8%-11% Y/Y FQ1 rev. growth vs. 9.1% consensus).
  • Notable decliners: FSL -5.3%. IDTI -6.4%. EZCH -3.3%. PMCS -4.3%. LSCC -6.8%. CAVM -4.7%. SMTC -4.1%. ATML -3.2%. TQNT -3.1%. RFMD -2.9%. IRF -2.9%.
  • Qualcomm, NXP, TriQuint, and Cirrus Logic report after the bell.
  • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG

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Comments (2)
  • Stock Market Mike
    , contributor
    Comments (2540) | Send Message
     
    Why is SWKS down? They're doing fine in China. Nearly 40% growth....

     

    -Mike
    23 Jul 2014, 12:42 PM Reply Like
  • Cory Streater
    , contributor
    Comments (6) | Send Message
     
    SWKS was up 17%, since their earnings call, as of the market open this morning. Even under the best of circumstances, there is bound to be some profit taking. In addition, historically a 1.5% drop isn't all that unusual for SWKS, particularly on a bad day for the industry as a whole.
    23 Jul 2014, 06:34 PM Reply Like
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