As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the semiconductors industry, including Penguin Solutions (NASDAQ: PENG) and its peers.
The semiconductor industry is driven by cyclical demand for advanced electronic products like smartphones, PCs, servers, and data storage. While analog chips serve as the building blocks of most electronic goods and equipment, processors (CPUs) and graphics chips serve as their brains. The growth of data and technologies like artificial intelligence, 5G, the Internet of Things, and smart cars are creating the next wave of secular growth for the industry.
The 5 semiconductors stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was 5.9% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12.5% since the latest earnings results.
Best Q3: Penguin Solutions (NASDAQ: PENG)
Based in the US, Penguin Solutions (NASDAQ: PENG) is a diversified semiconductor company offering memory, digital, and LED products.
Penguin Solutions reported revenues of $566.7 million, up 67.7% year on year. This print exceeded analysts’ expectations by 8.8%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ operating income estimates.
Penguin Solutions achieved the biggest analyst estimate beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 19.6% since reporting and currently trades at $51.63.
Is now the time to buy Penguin Solutions? Access our full analysis of the earnings results here, it’s free.
Western Digital (NASDAQ: WDC)
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Western Digital reported revenues of $4.38 billion, up 55.5% year on year, outperforming analysts’ expectations by 5.2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ operating income estimates.
Western Digital delivered the highest guidance raise in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 6.9% since reporting. It currently trades at $331.10.
Is now the time to buy Western Digital? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Lam Research (NASDAQ: LRCX)
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Lam Research reported revenues of $8.22 billion, up 54.4% year on year, in line with analysts’ expectations. Still, it was a satisfactory quarter as it posted a significant improvement in its inventory levels.
Lam Research delivered the weakest performance against analyst estimates and weakest guidance update among its peers. As expected, the stock is down 12.6% since the results and currently trades at $228.48.
Read our full analysis of Lam Research’s results here.
Texas Instruments (NASDAQ: TXN)
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Texas Instruments reported revenues of $6.06 billion, up 27.7% year on year. This print topped analysts’ expectations by 2.6%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ operating income estimates.
Texas Instruments had the slowest revenue growth of the whole group. The stock is down 2.7% since reporting and currently trades at $277.32.
Read our full, actionable report on Texas Instruments here, it’s free.
Micron (NASDAQ: MU)
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NASDAQ: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Micron reported revenues of $54.23 billion, up 379% year on year. This number surpassed analysts’ expectations by 6.4%. It was an exceptional quarter as it also produced revenue guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ operating income estimates.
Micron achieved the fastest revenue growth among its peers. The stock is down 20.6% since reporting and currently trades at $845.40.
Read our full, actionable report on Micron here, it’s free.
Market update
Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.
Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.
By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
