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Jan. 26, 2022, 8:20 a.m. EST

Chip sector flirting with bear-market territory as semiconductor earnings kick off

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By Wallace Witkowski

Semiconductors stocks fell further with the broader market selloff Tuesday, and have been skating dangerously close to bear-market territory this week as U.S. chip makers are set to begin reporting holiday-season earnings.

The PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +4.03% was down as much as 4% to an intraday low of 3335.70 Tuesday, ahead of the first big semiconductor earnings report of the season after the bell. That low marks a 17.4% drop from the index’s 4039.51 closing high on Dec. 27; on Monday, before the broader market staged an epic rebound from a big selloff, the chip index was as much as 19.4% off that high.

In one hopeful sign, Texas Instruments Inc. /zigman2/quotes/202237907/composite TXN +2.21% on Tuesday following the close of markets, beat its own and Wall Street’s expectations and forecast a strong outlook. Shares were up more than 5% after hours.

Chip stocks have already suffered a correction, which signifies a 10% drop from recent highs, while a bear market is defined as a 20% drop from those highs. For the chip sector to slip into a bear market, the SOX index would have to drop below 3231.61.

In comparison, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.47% on Tuesday was as much as 10.6% off its recent highs, while the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +3.33% was off as much as 16.5%.

Earnings preview: Chips may be sold out for 2022 thanks to shortage, but investors are worried about the end of the party

With the world still struggling to emerge from a chip shortage sparked by the COVID-19 pandemic , the U.S. Commerce Department reported Tuesday that inventories at manufacturers who use semiconductors are very low and could result in factory shutdowns .

In the meantime, the biggest drags on the sector are its largest names, all of which are firmly in bear territory. Intel Corp. /zigman2/quotes/203649727/composite INTC +2.46% , which is scheduled to report on Wednesday, is 25% off its April 9 closing of $68.26.

Nvidia Corp. /zigman2/quotes/200467500/composite NVDA +5.38% is 32% off its Nov. 29 closing high of $333.76, and shares of Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD +3.55% are 31% off their closing high of $161.91 from the same day. AMD is scheduled to report earnings on Feb. 1, while Nvidia is estimated to report on Feb. 17.

Shares of Marvell Technology Inc. /zigman2/quotes/200053236/composite MRVL +6.72% are 25% off their Dec. 7 high of $91.51, with the company forecast to report around March 10. GlobalFoundries Inc. /zigman2/quotes/230483311/composite GFS +1.03% , which reports on Feb. 8, sees shares 31% off their $70.54 high from Nov. 29. The third-party foundry went public in October at $47 a share.

Close to bear territory are shares of Broadcom Inc. /zigman2/quotes/200646538/composite AVGO +5.92% , which are 19.3% off their Dec. 27 high of $674.28. The company estimated to report around March 17.

Chip makers that are not yet in bear territory include Texas Instruments, 12.4% off an Oct. 21 closing high of $201.29, and Qualcomm Inc. /zigman2/quotes/206679220/composite QCOM +3.65% , which is 11% off its Dec. 15 close of $189.28. Qualcomm is scheduled to report Feb. 2.

Shares of chip manufacturing equipment supplier Lam Research Corp. /zigman2/quotes/208077897/composite LRCX +4.28% are 18.2% off their Jan. 14 high of $729.82, while shares of KLA Corp. /zigman2/quotes/209248041/composite KLAC +5.09% are 15.1% off their Jan. 14 high of $445.00 on Thursday. Lam reports Wednesday and KLA Corp. reports Thursday.

Micron Technology Inc. /zigman2/quotes/205710729/composite MU +3.85% shares are 15.8% off their Jan. 14 high of $97.36, with an estimated earnings report around March 30.

/zigman2/quotes/210598361/realtime
US : Nasdaq
3,115.35
+120.74 +4.03%
Volume: 313,163
May 27, 2022 5:16p
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/zigman2/quotes/202237907/composite
US : U.S.: Nasdaq
$ 177.97
+3.84 +2.21%
Volume: 5.86M
May 27, 2022 4:00p
P/E Ratio
20.35
Dividend Yield
2.58%
Market Cap
$160.57 billion
Rev. per Employee
$611,613
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/zigman2/quotes/210599714/realtime
US : S&P US
4,158.24
+100.40 +2.47%
Volume: 2.17B
May 27, 2022 5:49p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
12,131.13
+390.48 +3.33%
Volume: 4.20M
May 27, 2022 5:16p
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/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 44.55
+1.07 +2.46%
Volume: 30.55M
May 27, 2022 4:00p
P/E Ratio
7.41
Dividend Yield
3.28%
Market Cap
$177.79 billion
Rev. per Employee
$641,652
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/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 188.11
+9.60 +5.38%
Volume: 73.84M
May 27, 2022 4:00p
P/E Ratio
50.45
Dividend Yield
0.09%
Market Cap
$446.99 billion
Rev. per Employee
$1.20M
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/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 102.26
+3.51 +3.55%
Volume: 104.35M
May 27, 2022 4:00p
P/E Ratio
38.14
Dividend Yield
N/A
Market Cap
$160.03 billion
Rev. per Employee
$1.22M
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/zigman2/quotes/200053236/composite
US : U.S.: Nasdaq
$ 60.82
+3.83 +6.72%
Volume: 22.14M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.39%
Market Cap
$48.32 billion
Rev. per Employee
$663,157
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/zigman2/quotes/230483311/composite
US : U.S.: Nasdaq
$ 60.10
+0.61 +1.03%
Volume: 2.70M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$31.64 billion
Rev. per Employee
N/A
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/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 583.28
+32.62 +5.92%
Volume: 3.73M
May 27, 2022 4:00p
P/E Ratio
28.92
Dividend Yield
2.81%
Market Cap
$222.37 billion
Rev. per Employee
$1.37M
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/zigman2/quotes/206679220/composite
US : U.S.: Nasdaq
$ 139.76
+4.92 +3.65%
Volume: 9.18M
May 27, 2022 4:00p
P/E Ratio
14.31
Dividend Yield
2.15%
Market Cap
$151.02 billion
Rev. per Employee
$872,556
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/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 531.02
+21.81 +4.28%
Volume: 1.65M
May 27, 2022 4:00p
P/E Ratio
16.60
Dividend Yield
1.13%
Market Cap
$70.64 billion
Rev. per Employee
$1.18M
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/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 371.27
+17.99 +5.09%
Volume: 1.46M
May 27, 2022 4:00p
P/E Ratio
18.01
Dividend Yield
1.13%
Market Cap
$52.72 billion
Rev. per Employee
$764,943
loading...
/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 73.32
+2.72 +3.85%
Volume: 13.08M
May 27, 2022 4:00p
P/E Ratio
9.22
Dividend Yield
0.55%
Market Cap
$78.84 billion
Rev. per Employee
$724,860
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