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 +1.77% 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 +0.17% 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 +0.31% on Tuesday was as much as 10.6% off its recent highs, while the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.24% 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 +0.78% , which is scheduled to report on Wednesday, is 25% off its April 9 closing of $68.26.

Nvidia Corp. /zigman2/quotes/200467500/composite NVDA +4.37% is 32% off its Nov. 29 closing high of $333.76, and shares of Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD +4.27% 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 +2.31% 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 +2.51% , 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 -2.51% , 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 +2.21% , 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 +1.73% are 18.2% off their Jan. 14 high of $729.82, while shares of KLA Corp. /zigman2/quotes/209248041/composite KLAC +3.12% 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 +0.58% 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
2,959.46
+51.50 +1.77%
Volume: 146,570
May 19, 2022 11:44a
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/zigman2/quotes/202237907/composite
US : U.S.: Nasdaq
$ 170.59
+0.29 +0.17%
Volume: 1.63M
May 19, 2022 11:44a
P/E Ratio
19.32
Dividend Yield
2.72%
Market Cap
$157.04 billion
Rev. per Employee
$611,613
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/zigman2/quotes/210599714/realtime
US : S&P US
3,935.94
+12.26 +0.31%
Volume: 1.02B
May 19, 2022 11:44a
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/zigman2/quotes/210598365/realtime
US : Nasdaq
11,559.90
+141.75 +1.24%
Volume: 1.82M
May 19, 2022 11:44a
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/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 42.68
+0.33 +0.78%
Volume: 10.58M
May 19, 2022 11:44a
P/E Ratio
7.04
Dividend Yield
3.45%
Market Cap
$173.17 billion
Rev. per Employee
$641,652
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/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 176.78
+7.40 +4.37%
Volume: 29.97M
May 19, 2022 11:44a
P/E Ratio
45.26
Dividend Yield
0.09%
Market Cap
$424.13 billion
Rev. per Employee
$1.20M
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/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 100.39
+4.11 +4.27%
Volume: 69.71M
May 19, 2022 11:44a
P/E Ratio
36.97
Dividend Yield
N/A
Market Cap
$156.02 billion
Rev. per Employee
$1.22M
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/zigman2/quotes/200053236/composite
US : U.S.: Nasdaq
$ 56.28
+1.27 +2.31%
Volume: 4.28M
May 19, 2022 11:44a
P/E Ratio
N/A
Dividend Yield
0.43%
Market Cap
$46.64 billion
Rev. per Employee
$663,157
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/zigman2/quotes/230483311/composite
US : U.S.: Nasdaq
$ 55.04
+1.35 +2.51%
Volume: 511,082
May 19, 2022 11:44a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$28.55 billion
Rev. per Employee
N/A
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/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 556.23
-14.34 -2.51%
Volume: 1.14M
May 19, 2022 11:44a
P/E Ratio
31.29
Dividend Yield
2.99%
Market Cap
$232.95 billion
Rev. per Employee
$1.43M
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/zigman2/quotes/206679220/composite
US : U.S.: Nasdaq
$ 133.33
+2.88 +2.21%
Volume: 2.49M
May 19, 2022 11:44a
P/E Ratio
13.51
Dividend Yield
2.27%
Market Cap
$146.10 billion
Rev. per Employee
$872,556
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/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 485.72
+8.24 +1.73%
Volume: 324,766
May 19, 2022 11:44a
P/E Ratio
14.98
Dividend Yield
1.25%
Market Cap
$66.23 billion
Rev. per Employee
$1.18M
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/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 344.26
+10.41 +3.12%
Volume: 341,614
May 19, 2022 11:44a
P/E Ratio
16.45
Dividend Yield
1.24%
Market Cap
$49.82 billion
Rev. per Employee
$764,943
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/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 71.46
+0.41 +0.58%
Volume: 6.62M
May 19, 2022 11:44a
P/E Ratio
8.87
Dividend Yield
0.57%
Market Cap
$79.34 billion
Rev. per Employee
$724,860
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