Forward Guidance
It’s no secret that CEOs, especially public company CEOs, have “a horse in the race” regarding their rhetoric on earnings calls about their underlying companies’ financial health and future growth prospects. While a CEO must tell the truth to Wall Street, management teams will often put a positive spin on what lies ahead.
“Once is happenstance, twice is a coincidence, three times is a pattern.” ~ Ian Flemming
Nevertheless, savvy investors understand that though they should sometimes take bias-driven statements with a grain of salt, no one has greater visibility than insiders. Better yet, investors can gain a fair amount of conviction if several CEOs in an industry make similar statements.
Semis Standout
One industry with an obvious positive trend is the semiconductor/artificial intelligence (AI) space.
Broadcom Smashes Earnings
Broadcom (AVGO) is a top semiconductor and software developer for AI applications used in data centers. After the market closed Thursday, AVGO gained over 14% to print fresh all-time highs. In theearnings call Broadcom CEO Hock Tan revealed that “Three hyperscalers are planning to deploy 1 million XPU clusters across a single fabric by 2027, representing a $60-90 billion opportunity in FY27 alone.”
AMD Touts AI Prospects at Barclays Conference
Advanced Micro Devices (AMD) is a leading semiconductor manufacturer for AI applications. Presenting a technology conference, management said they are seeing “Significant in Generative AI and believe we are in a super compute investment cycle, which will drive accelerated market expansion.”
Marvell Spikes After CFO Comments
Marvell (MRVL) is another semiconductor that is benefitting from the AI buildout. Last week, shares soared 23% on massive volume turnover after reporting earnings. On the conference call, the Marvell CEO said, “Marvell’s data center end market has grown to account for 73% of our consolidated revenue in the third quarter, driven by AI, and we expect this percentage to increase again in the fourth quarter.”
Nvidia Sees Insane Demand
No better AI bellwether exists than Nvidia (NVDA). Weeks ago, CEO Jensen Huang gushed that the company is experiencing “Insane demand” for its latest chip, dubbed Blackwell.
Astera Labs: A New AI Leader
The bullish theme is not only occurring in legacy semiconductor stocks like the ones mentioned above. Astera Labs (ALAB), a semiconductor solution provider for AI infrastructure, announced quarterly earnings that exploded by more than 200%. In the EPS call, CEO Jitendra Mohan enthusiastically said, “Our business has entered a new growth phase with multiple product families ramping across AI platforms, featuring both third-party GPUs and internally developed AI accelerators, which drove the Q3 sales upside versus our guidance.”
Conclusion
It’s imperative that investors monitor industry themes and earnings calls to gauge an industry’s prospects. Several CEOs in the semiconductor industry echo the notion that growth will remain solid, driven primarily by the AI boom.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Astera Labs, Inc. (ALAB) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
