Market Insights

First-quarter earnings season has begun with an explosive move in semiconductor and IT hardware stocks.

Chipmakers like Intel (INTC) and networking companies like Arista Networks (ANET) have rallied sharply since late March. Some of the gains have resulted from product wins and new contracts. Optimism about the Iran war ending and strong economic data have also supported sentiment.

The strength in chips and equipment continues a trend from last earnings season. Software companies have mostly struggled in that time on worries that AI will disrupt their businesses. The result has been a historic divergence between hardware and software inside the broader technology sector.

Investors could remain wary of software companies, which typically trade at higher multiples than chips and hardware. That could be a risk given recent strong economic reports and a Federal Reserve meeting next Wednesday, April 29.

This table provides the timing for select stocks in the group. (Note: All earnings are due after the closing bell on their respective dates.)

Recent News

• INTC is having its biggest monthly gain since 1974 (up 50 percent so far in April). The rally started when INTC announced it would help design, fabricate and package chips for Elon Musk’s Terafab project. Wired also reported the company may provide services to Amazon.com (AMZN) and Alphabet (GOOGL). Earnings are due tomorrow afternoon.
• Morgan Stanley sees the most opportunity in memory-chip makers like Micron Technology (MU) and SanDisk (SNDK). The price target of INTC, which focuses on CPUs, was also raised.
• KeyBanc favors INTC, MU and Nvidia (NVDA) on the potential for a longer cycle of rising shipments. The analysts cited tight inventories and potential for higher prices.
• BNP Paribas raised INTC’s target price from $34 to $60 and upgraded the stock from underperform to neutral. The analyst sees agentic AI boosting CPU demand, plus operational improvements under the company’s 14A manufacturing program.
• Broadcom (AVGO) announced a three-year partnership with Meta Platforms (META) to develop Meta Training and Inference Accelerator (MTIA) chips. Analysts at firms including J.P. Morgan and Wells Fargo viewed the news favorably, saying it will boost revenue and expand AVGO’s role in inference.
• Stifel raised its price target on Advanced Micro Devices (AMD) from $280 to $320, citing AI demand and new customer commitments.

Intel (INTC), daily chart, with select patterns and indicators.

• Apple (AAPL) announced John Ternus will become its new CEO in September. Ternus previously led hardware engineering and has overseen key products like the iPhone, iPad and Mac. He replaces Tim Cook, who was appointed in 2011 by AAPL’s legendary co-founder, Steve Jobs.
• FactSet noted that NVDA is driving earnings growth for Mag7 companies. The other six are only growing 6.4 percent, compared with 10.1 percent for the other 493 companies in the S&P 500 index.
• META rallied after releasing Muse Spark, the inaugural AI model developed by Meta Superintelligence Labs. Reuters separately reported the social-media giant will cut 10 percent of its staff, or 8,000 workers. Wells Fargo lowered its price target from $856 to $765 in early April, seeing a potentially weaker macro environment.
• UBS upgraded Tesla (TSLA) from sell to neutral, seeing long-term potential in robots and robo-taxis.
• Anthropic committed to spending more than $100 billion on AMZN’s AWS over the next 10 years. AMZN also plans to invest an additional $25 billion in the closely held AI giant.
• Adam Parker of Trivariate Research thinks software companies are “structurally in trouble.” He sees great opportunities in semiconductors, according to an interview on CNBC.
• “Big Short” investor Michael Burry said he’s holding puts on Palantir Technologies (PLTR), citing potential overvaluation.

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