Which Top Chip Stocks are Winning the Earnings Game?

Earnings trends are extremely important when evaluating stocks. At Wall St. Cheat Sheet, we view increasing earnings quarter-over-quarter as a simple way to gauge whether costs and the business model are stable. Then we like to analyze whether the company is outperforming peers in the sector. This is what we call the “E-Squared” investment analysis (‘E = Earnings Are Increasing Quarter-Over-Quarter’ + ‘E = Excellent Relative Performance Versus Peers and Sector’).

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Here’s your Cheat Sheet to how these top 5 chip stocks rank via earnings trends:

NVIDIA (NASDAQ:NVDA): Current Price $12.71

Fiscal Year 2009 2010 2011 2012 2013
Revenue ($) in millions 3,425 3,326 3,543 3,998 4,280
Diluted EPS ($) -0.05 -0.12 0.43 0.94 0.19

Nvidia swung impressively back into the black after the loss in 2010, but could not maintain the momentum into 2013. EPS declined sharply in the latest year…

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Next, our CHEAT SHEET investing framework asks us to drill down to the recent quarterly data:

Quarter Jan. 31, 2012 Apr. 30, 2012 Jul. 31, 2012 Oct. 31, 2012 Jan. 31, 2013
Revenue ($) in millions 953.19 924.88 1,044 1,204 1,107
Diluted EPS ($) 0.18 0.10 0.19 0.33 0.28

Unfortunately, EPS also took a hit in the latest quarter, and we therefore drop this company from our list…