Here’s what Nvidia’s report could mean for these 3 major tech names

of Nvidia (NASDAQ:NVDA)’s second-quarter earnings results turned heads, but the market didn’t respond as favorably as one might think. Despite healthy revenue and earnings, as well as an increase in guidance, the company hasn’t beaten earnings as much as the market seems to see it. And that’s to say nothing of the Justice Department’s reported investigation into the company’s market dominance in certain areas, including its recent acquisitions related to artificial intelligence, which Nvidia recently denied it had yet heard about.

That whole saga is one we’ll have to follow. But when it comes to earnings (which this article covers), there’s a lot of meat to split and dive into. The chip maker reported quarterly revenue that was up 15% sequentially and 122% year-over-year due to incredible data center revenue growth (up 154% year-over-year). Additionally, earnings per share grew even more, moving 168% higher year-over-year.

These figures should certainly be encouraged by the market and provide a boon to the entire sector. If Nvidia succeeds and continues to grow, one could argue that the following stocks should see impressive appreciation as well.

Here’s what Nvidia’s impressive growth profile, as highlighted in its recent earnings report, could mean for these three major chip players.

Key points about this article:

• Nvidia’s recent massive earnings beat wasn’t enough to propel the stock higher this time, with the stock falling on the report of a number of key issues.
• That said, if Nvidia’s growth and fundamentals continue from here, these three chipmakers could also be key stocks for investors to watch.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

Advanced Micro Devices (AMD)

An AMD office building

Advanced microdevices (NASDAQ:AMD) is among Nvidia’s competitors that have seen similar volatility in recent weeks. However, unlike high-performance computing chip leader Nvidia, AMD’s price performance has been quite disappointing this year, with the stock currently down year-to-date at the time of writing.

This is partly because, while AMD has some AI chips in its arsenal, the company’s market share is falling compared to Nvidia. Some experts have highlighted Advanced Micro Devices as a key competitor in the chip industry, especially in the future of AI chip development. And the company’s upcoming slate of AI chips could provide that secondary option that many investors are looking for, meaning AMD stock has been seen by some as a call option for the continuing madness of the AI ​​race.

The thing is, AMD’s valuation is priced considerably higher, and the AI ​​chip rollout has been slower than expected. But with impressive results recorded in the second quarter, inclusive 115% growth in data center revenue, the company’s shift to AI as its core business could propel much more from here. In addition, the company’s $4.9 billion acquisition of ZT Systems further strengthens its AI capabilities.

Despite recent share price volatility, AMD’s continued innovation positions it for strong growth going forward. With growing cash reserves and diversified opportunities, AMD is poised for continued growth in AI and related industries.

Taiwan Semiconductor (TSM)

TSMC Office Building

Taiwan Semiconductor (NASDAQ:TSM) is a leading chip foundry with over 60% of the global market. Providing foundry services for a wide range of chipmakers (including Nvidia), TSMC is often seen as a chipmaker in the AI ​​chipper game that is Nvidia.

Offering broad exposure to semiconductor growth trends with a less volatile share price, we saw TSM as perhaps the best way to play the sector from a broad perspective outside of owning an ETF. As the company continues to expand its advanced chip manufacturing capabilities, I believe Taiwan Semi is well positioned to drive the secular tailwinds in this space much higher.

During the last quarter, the company saw strong revenue growth of 32%, and analysts expect this company to see continued strong growth. I believe that as long as the foundry market remains strong, TSMC’s pole position in this high-growth sector should bode well for long-term investors looking to build a position.

TSM stock isn’t cheap, trading around 10 times sales at the time of writing. However, as the chip market continues to expand, this company’s total addressable market and total revenue share should grow very rapidly. In terms of quality, TSMC remains a top choice in the chip sector right now.

ASML Holdings (ASML)

ASML office building

ASML Holdings (NASDAQ:ASML) is another “meta” play on the chip sector. The company provides key semiconductor manufacturing equipment to a range of foundries and direct manufacturers in this space. Producing critical lithography systems for microchip manufacturing, the latest company EUV scanner enables the creation of some of the smallest chips possible today. These chips are becoming increasingly important for AI and other key technologies. ASML continues to report strong growth driven by AI demand and improving inventory levels, with impressive prospects in certain areas of the chip market, such as the electrification and AI-adjacent sectors.

The company reported mixed results from Q2 2024. Net sales of land options and services rose 14.3% year-on-year to €1.48 billion, but total net sales fell 9.6% to €6.24 billion. These results came on sales of 89 new and 11 used lithography systems, marking significant increases over the previous quarter. Net bookings rose to 5,567, up from 3,611. In addition, ASML and Imec also launched the High NA EUV lithography laboratory, improving access to cutting-edge technology.

ASML Holdings has improved the use of lithography tools for both logic and memory customers and stands to benefit from its technology investments, particularly in EUV infrastructure. With new fab orders and expectations for a stronger second half of 2024 and a turnaround in 2025, ASML is improving its ability to meet growing demand with the support of its supply chain partners.

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