Close menu

August 3rd, 2022 | 12:52 CEST

Is the turnaround coming for chip stocks? Intel, Nvidia, BrainChip, Aixtron and AMD

  • Technology
  • AI
Photo credits:

Last year, semiconductors were declared the new gold due to blown-up supply chains and the resulting shortages. After the recent boom and the build-up of overcapacity, the market could now grind to a halt by 2023 at the latest. High inflation, a global economic downturn and a possible recession in the industry could do the rest. Last week, Intel was already in the red with a slump in sales. In contrast, other companies from the chip sector could report positive surprises.

time to read: 4 minutes | Author: Stefan Feulner
ISIN: INTEL CORP. DL-_001 | US4581401001 , NVIDIA CORP. DL-_001 | US67066G1040 , BRAINCHIP HOLDINGS LTD | AU000000BRN8 , AIXTRON SE NA O.N. | DE000A0WMPJ6

Table of contents:

    Intel, AMD, Infineon, Nvidia - catastrophic figures ahead

    Horror figures, disaster....! The media did not shy away from superlatives when announcing the results for the second quarter. Intel shocked analysts and investors alike, who subsequently acknowledged this with a share price drop of over 10%. The one-time market leader saw its revenue drop 22% to USD 15.32 billion, alienating a crowd of analysts still expecting USD 18.62 billion.

    Adjusted earnings per share were USD 0.29, compared with the expected USD 0.70. The net result was a loss of USD 454 million; last year Intel still generated a profit of almost USD 5 billion. The gross margin fell from 50.4% in Q1 2022 to just 36.5% in Q2 2022.

    "The sudden and rapid decline in economic activity was the primary reason for the shortfall, but Q2 also reflected our own execution issues in areas such as product design and ramping up AXG (Accelerated Computing Systems and Graphics Group) offerings," CEO Gelsinger said, explaining the downturn.

    The reins have been tightened once again for the full year, and forecasts have been lowered. Management led by CEO Patrick Gelsinger, the world's highest-paid executive at USD 179.00 million last year, expects adjusted earnings per share of USD 2.30. The original estimate was USD 3.60 per share. The revenue target was restated in a range of USD 65 billion to USD 68 billion. Previously, Intel wanted to generate up to USD 76 billion.

    It is well known that the problems are homemade, and Intel has been working on restructuring for a long time. Thus, this strong revenue downturn should not be completely transferable to the entire industry. Investors should gain new insights when the competition presents its figures for the second quarter. Advanced Micro Devices delivered yesterday after the close of the stock market, while the German player Infineon plans to surprise positively today, Wednesday. Nvidia, on the other hand, is not expected to attract investors' attention until August 24.

    BrainChip - Entry into the mass market

    The next-generation chip is currently being developed by the Australian IP company BrainChip. The novel technology of the Akida chip could see a market shift in the near future that could shake up the incumbents. Another possibility would be the acquisition of the revolutionary technology by a global player, which would likely make BrainChip an attractive takeover candidate. It is no coincidence that the Akida chip was recently accepted into the AI Partner Program by ARM. Mercedes-Benz also relies on the novel technology for its EQXX.

    The USP of the innovative processor lies in the fact that it is very low-power, high-performance and promotes the growth of edge AI technology through the use of neuromorphic architecture, a type of artificial intelligence inspired by the biology of the human brain. Experts see it as significantly more efficient than traditional chips, as it can learn independently with each process. Application areas, therefore, revolve around future topics such as autonomous driving, robotics and the Internet of Things.

    "Unlocking the future of AI" is what it says on the Company's homepage, which has already opened the door wide to the mass market. After a strong correction and a one-year low at AUD 0.76, BrainChip's stock has recovered sharply and stabilized above the AUD 1.00 level. Akida technology is also in high demand among major players. If further partnerships are announced, the next ramp-up should start. The all-time high was AUD 2.34 at the beginning of the year.

    Aixtron - Analysts divided

    The Herzogenrath-based Company already announced its figures for the second quarter at the end of July. Aixtron benefited from high demand from almost all end markets and recorded the highest order intake since 2011. It amounted to approximately EUR 283 million in the second quarter, 7% higher than a year earlier. At the half-year mark on June 30, 2022, a total of EUR 314 million was on the books. Sales grew by around 51% to EUR 102.5 million, and the gross margin was 37%, as in the same period last year. EBIT tripled to EUR 17.2 million. As a result, profits doubled to EUR 17.3 million.

    The MDAX member expects order intake to be between EUR 520 million and EUR 580 million for the full year. Sales should be between EUR 450 million and EUR 500 million, with a gross margin of around 41%.

    Various analyst houses expressed different opinions here. Private bank Berenberg raised its price target for Aixtron from EUR 26 to EUR 28 after quarterly figures and left its rating at "buy". In contrast, DZ Bank is significantly more pessimistic and downgraded the stock from "buy" to "sell". The price target was also lowered from EUR 27 to currently EUR 22.

    After the strong correction in chip stocks, the second quarter number season is now upon us. The former market leader, Intel, disappointed but has internal restructuring problems. On the other hand, AMD, Infineon and Nvidia could see a turnaround. BrainChip is on the verge of a breakthrough in the mass market and has high growth potential in the long term.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

    Risk notice

    Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.

    The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.

    The acquisition of financial instruments involves high risks, which can lead to the total loss of the invested capital. The information published by Apaton Finance GmbH and its authors is based on careful research. Nevertheless, no liability is assumed for financial losses or a content-related guarantee for the topicality, correctness, appropriateness and completeness of the content provided here. Please also note our Terms of use.

    Der Autor

    Stefan Feulner

    The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
    He is passionate about analyzing a wide variety of business models and investigating new trends.

    About the author

    Related comments:

    Commented by André Will-Laudien on May 21st, 2024 | 07:30 CEST

    Blackout ahead! Artificial intelligence becomes a power problem: Plug Power, Nel ASA and Carbon Done Right Developments

    • Sustainability
    • renewableenergies
    • AI
    • CarbonCredits

    OpenAI has unveiled a new version of ChatGPT that communicates more humanely than any AI before it. Google is also rebuilding its search engine and will answer queries with AI-generated summaries in the future. According to experts, the boom in such tools could soon lead to network overload or even a blackout. This is because AI applications consume an enormous amount of power in data centers. The energy consumption of an AI-generated question differs from a normal search engine entry by up to a factor of 10. This puts the energy transition at risk, as full electrification will require more and more electricity for electric vehicles, heat pumps and electricity-based industrial solutions, which politicians want to come from renewable energy sources. However, the International Energy Agency predicts that the electricity demand will increase by 80 to 150% by 2050. The stock market evaluates energy companies according to their return potential without any ideological bias. Where are the opportunities for investors?


    Commented by Juliane Zielonka on May 17th, 2024 | 07:00 CEST

    Almonty, Rheinmetall, Super Micro Computer - Commodity rally for defense and cloud

    • Mining
    • Tungsten
    • AI
    • Defense

    AI and defense stocks are setting the stock market on fire. Investors worldwide seem to have acquired a taste for artificial intelligence and defense. Wall Street is expecting a four-digit price target for Super Micro Computer soon. Rheinmetall is also enjoying full order books. Since the takeover of a Spanish ammunition manufacturer, production has also increased in this segment. Meanwhile, tensions between the largest economies, the USA and China, are growing enormously, which is reason enough for investors to take a look at Almonty Industries. The tungsten producer is on course for growth thanks to the restart of a mine in South Korea. Tungsten is rising in value as the increase in AI, and armaments are directly boosting demand for the rare earth metal. Who will win the stock market race?


    Commented by Juliane Zielonka on May 9th, 2024 | 07:15 CEST

    Carbon Done Right, Varta, Siemens Energy - On the road to success with clean energy

    • Sustainability
    • CarbonCredits
    • AI
    • renewableenergies

    The global energy transition requires active measures to tackle current environmental issues. Companies such as carbon credit trader Carbon Done Right are proving how a consistent focus on clean energy through environmentally friendly projects brings environmental and economic benefits. Their innovative use of AI to precisely monitor their tree inventories ensures complete traceability of their carbon credits, which creates trust with investors and buyer companies such as Microsoft. Innovations are urgently needed for economic success at VARTA AG. A large-scale battery research project based on common salt as an energy source is intended to bring the ailing company back into the profit zone. Siemens Energy is already one step ahead. The current balance sheet reflects the ongoing restructuring measures and tough cost-cutting measures to further advance clean energy technologies. But one thing is falling by the wayside...