Chip stocks finish higher, even as Intel hits 52-week low after 'below standard' quarter

Jul. 29, 2022 4:06 PM ETIntel Corporation (INTC), AMDTXN, NVDA, QCOM, ADI, MU, SWKS, AVGO, QRVOBy: Chris Ciaccia, SA News Editor28 Comments

Microprocessors on a dark background

Andrei Berezovskii/iStock Editorial via Getty Images

Semiconductor stocks ended Friday largely in positive territory, even as investors digested Intel's (NASDAQ:INTC) second-quarter shortfall and warning about the rest of the year.

Advanced Micro Devices (NASDAQ:AMD), Texas Instruments (TXN), Analog Devices (ADI) gained on Friday, led by a 3% rise in AMD as analysts speculated the Dr. Lisa Su-led company could benefit from Intel's (INTC) shortfall.

"Shift in consumer patterns away from COVID-times at home entertainment devices, combined with weak first-half seasonality, suggests no PC recovery near-term, with resulting under-utilization rates challenging gross margin recovery," Baird analyst Tristan Gerra wrote in a note to clients, downgrading Intel (INTC).

Gerra added that delays in Intel's (INTC) product roadmap should benefit Advanced Micro Devices (AMD) in the server market in the second half of the year.

AMD (AMD) is slated to report second-quarter results next week.

AMD-competitor Nvidia (NVDA) also rose, finishing with a 1% gain, while Qualcomm (QCOM) and Micron Technology (MU) dipped, but finished off the lows of the session. Investors continued to fret about Qualcomm's (QCOM) weak fourth-quarter guidance.

Other chipmakers, such as Broadcom (AVGO) and Qorvo (QRVO) finished the week with fractional gains, while Skyworks Solutions (SWKS) gained more than 1%.

Santa Clara, California-based Intel (INTC) fell more than 8.5% to close at $36.31, after touching a 52-week low of $35.24 earlier in the session.

Intel (INTC) Chief Executive Pat Gelsinger said the company's second-quarter results were "below the standards we have set for the company and our shareholders," while adding the chip giant would cut its spending and expenses for the remainder of the year.

Intel (INTC) sees third-quarter revenues between $15B and $16B, well below the $18.67B analysts were expecting. Non-GAAP gross margins are expected to be 46.5%, with earnings per share of $0.35. The company also lowered its full-year outlook for sales to be between $65B and $68B, compared to a previous outlook of $76B and analysts' expectations of $74.76B.

On Thursday's earnings call, Intel's (INTC) Gelsinger praised the fact that U.S. legislators have passed the CHIPS Act, which will now go to President Biden to be signed into law.

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