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 +5.01% 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 +3.85% 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 +2.02% on Tuesday was as much as 10.6% off its recent highs, while the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +2.76% 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 +3.06% , which is scheduled to report on Wednesday, is 25% off its April 9 closing of $68.26.

Nvidia Corp. /zigman2/quotes/200467500/composite NVDA +5.29% is 32% off its Nov. 29 closing high of $333.76, and shares of Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD +8.73% 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 +5.52% 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 +5.46% , 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 +4.37% , 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 +4.32% , 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 +6.18% are 18.2% off their Jan. 14 high of $729.82, while shares of KLA Corp. /zigman2/quotes/209248041/composite KLAC +6.34% 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 +5.69% 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
3,066.50
+146.44 +5.01%
Volume: 345,106
May 17, 2022 5:16p
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/zigman2/quotes/202237907/composite
US : U.S.: Nasdaq
$ 174.98
+6.48 +3.85%
Volume: 5.85M
May 17, 2022 4:00p
P/E Ratio
20.01
Dividend Yield
2.63%
Market Cap
$155.38 billion
Rev. per Employee
$611,613
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/zigman2/quotes/210599714/realtime
US : S&P US
4,088.85
+80.84 +2.02%
Volume: 2.46B
May 17, 2022 4:54p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
11,984.52
+321.73 +2.76%
Volume: 4.44M
May 17, 2022 5:16p
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/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 44.40
+1.32 +3.06%
Volume: 28.60M
May 17, 2022 4:00p
P/E Ratio
7.38
Dividend Yield
3.29%
Market Cap
$176.15 billion
Rev. per Employee
$641,652
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/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 181.77
+9.13 +5.29%
Volume: 58.58M
May 17, 2022 4:00p
P/E Ratio
47.28
Dividend Yield
0.09%
Market Cap
$432.29 billion
Rev. per Employee
$1.20M
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/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 102.47
+8.23 +8.73%
Volume: 164.23M
May 17, 2022 4:00p
P/E Ratio
38.22
Dividend Yield
N/A
Market Cap
$152.72 billion
Rev. per Employee
$1.22M
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/zigman2/quotes/200053236/composite
US : U.S.: Nasdaq
$ 58.28
+3.05 +5.52%
Volume: 8.40M
May 17, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.41%
Market Cap
$46.82 billion
Rev. per Employee
$663,157
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/zigman2/quotes/230483311/composite
US : U.S.: Nasdaq
$ 56.00
+2.90 +5.46%
Volume: 2.88M
May 17, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$28.24 billion
Rev. per Employee
N/A
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/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 608.15
+25.48 +4.37%
Volume: 2.47M
May 17, 2022 4:00p
P/E Ratio
34.66
Dividend Yield
2.70%
Market Cap
$237.89 billion
Rev. per Employee
$1.43M
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/zigman2/quotes/206679220/composite
US : U.S.: Nasdaq
$ 139.69
+5.78 +4.32%
Volume: 9.09M
May 17, 2022 4:00p
P/E Ratio
14.30
Dividend Yield
2.15%
Market Cap
$149.98 billion
Rev. per Employee
$872,556
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/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 512.27
+29.80 +6.18%
Volume: 1.64M
May 17, 2022 4:00p
P/E Ratio
16.02
Dividend Yield
1.17%
Market Cap
$66.93 billion
Rev. per Employee
$1.18M
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/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 351.51
+20.97 +6.34%
Volume: 1.66M
May 17, 2022 4:00p
P/E Ratio
17.06
Dividend Yield
1.19%
Market Cap
$49.33 billion
Rev. per Employee
$764,943
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/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 74.48
+4.01 +5.69%
Volume: 17.67M
May 17, 2022 4:00p
P/E Ratio
9.37
Dividend Yield
0.54%
Market Cap
$78.69 billion
Rev. per Employee
$724,860
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