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The latest financial reports from technology giants were mixed, with capital spending not revised up as expected, leading to a decline in semiconductor stocks. The market is now turning its attention to follow-up moves from Nvidia, Micron and Alphabet, which are expected to revive the chip market.
Earnings reports from US technology giants generally show strong demand for chips, boosting semiconductor stocks. However, these technology giants issued mixed messages this week, causing chip stocks to fall rather than rise. Investors will be focused on key events in the coming months in hopes of reviving chip stocks.
Technology stock earnings reports this week were mixed with troubling news.
alphabet andAmazon Neither of them raised their full-year capital expenditure forecasts, keeping them at US$200 billion and US$220 billion respectively; Most of the AI capital expenditures of these ultra-large-scale cloud players will flow into the pockets of semiconductor companies. Alphabet’s cloud business revenue doubled to $30.7 billion last quarter, partly driven by sales of its own tensor processors (TPUs) — which may be down.Huida (Nvidia) Market Share. Intel’s third-quarter earnings were better than market expectations, but fourth-quarter revenue was disappointing.
However, exciting good news could still emerge in the coming months, leading to a bounce back in semiconductor stocks after a deep decline.
The first is Nvidia’s third-quarter financial report, announced on November 17. FactSet data shows that over the past 20 quarters, HUDA Data Center’s revenue has fallen short of market expectations only three times. The average result was 5.1% above consensus forecasts.
The market has long been accustomed to Huida outperforming expectations, but investors are still hoping to benefit from it, like rain after a long drought. Since the announcement of its financial report at the end of August, HUDA’s data center forecast has exceeded expectations, and its share price rose 8.7% the next day, reversing several consecutive months of decline in stock prices and sending semiconductor stocks surging.
Other key events expected to encourage semiconductor stocks include: Micron Technology (Micron)’s financial report released on December 23, and the 2027 Consumer Electronics Show (CES) in Las Vegas on January 6, where a series of keynote speeches will focus on semiconductor stocks.
This will be followed by Alphabet’s fourth-quarter financial report and legal meeting, which will show that, as the company’s chief financial officer said on the 28th, “capital expenditures are expected to increase significantly in 2027.” Analysts estimate Alphabet’s capital spending next year will reach US$318 billion. If the actual figure is the same or higher, it is expected to help chip stocks rise.
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Because neither Alphabet nor Amazon raised their full-year capital spending forecasts, market optimism about demand for AI-related chips has cooled, and Intel’s poor fourth-quarter revenue outlook has put downward pressure on semiconductor stocks.
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Nvidia’s third-quarter financial report released on November 17 attracted the most attention. Over the past 20 quarters, Nvidia’s data center revenue has fallen short of expectations only three times. If it beats market estimates again, it could send chip stocks higher overall.
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Follow-up will include Micron’s financial report on December 23, the CES keynote speech on January 6, and Alphabet’s fourth quarter financial report and conference call; If its capex expectations are raised further, it could reenergize semiconductor stocks.
