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Analogous results Tanked shares in the automotive sector. Nvidia escaped.

Semiconductor maker Analog Devices delivered a quarterly sales record on Tuesday. The stock fell anyway. Management’s comments about the auto industry did. Sales in that end market are expected to fall in the current quarter.

That revelation sent shares in a number of other auto-related stocks around the world plunging.

“We delivered another very strong quarter, record revenues of $3.26 billion exceeded the midpoint of guidance and represented [Analog’s] 13th consecutive quarter of sequential growth,” CFO Prashanth Mahendra-Rajah said at the company’s earnings conference call. “On a year-over-year basis, we grew 10%, again led by all-time highs in industrials and automotive.” Car-related sales accounted for 24% of Analog̵[ads1]7;s sales.

It didn’t matter anyway. Analog (ticker: ADI ) shares fell 7.8% on Wednesday, closing at $173.20, while

S&P 500


Nasdaq Composite

fell by 0.7% and 0.6% respectively.

Guidance did it. Sales in the current quarter are expected to be around $3.1 billion. Wall Street was looking for a little more. And sales to industrial and automotive end markets should fall by approx. 3% to 6% sequentially, which gives approx. 100 million dollars of the total revenues.

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“China was definitely the kind of new information that has developed over the recent period,” Mahendra-Rajah added. “We’ve had three quarters of decline in China, and we expect a fourth.”

Auto-related weakness in China is not what investors want to hear. The statement may have been part of the reason Tesla ( TSLA ) fell 1.5% and NIO ( NIO ) shares fell 9.6%. Weak quarterly sales from Chinese electric vehicle maker XPeng (XPEV), reported Wednesday, didn’t help either. The XPeng share fell 5.1 percent.

For the analog quarter, “automotive [business] was affected by a slower increase in Chinese EVs,” Susquehanna analyst Christopher Rolland wrote in a Wednesday report. “We view these comments as hinting at the long-awaited auto/industry downturn … the correction here has begun.” He still rates shares as a buy His price target dropped to $215 from $225 per share.

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New cars require more and more chips. And electric cars require more chips than conventional cars. Both trends have been a tailwind for chip manufacturers. A looming “correction” could take some extra air out of semiconductor stocks in the coming weeks.

The news is not equally bad for all chip players. “Bad for them [chip makers] exposed to cars, those exposed to AI don’t care, says New Street Research analyst Pierre Ferragu. “Usually not the same players.”

Nvidia (NVDA) is one that has both AI exposure and auto exposure, but auto exposure is relatively small, although it is growing. “Nvidia’s data center GPU products continue to see strong demand from both AI-focused and broader data center demand,” Stifel analyst Ruben Roy wrote in a research note on Monday.

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Nvidia’s data center and so-called “professional visualization” sales accounted for $16.5 billion in 2022, or about 61% of total revenue. These categories grew by around 30% year-on-year. Auto-related sales in 2022 came in at $903 million, or about 3% of total sales. A small fraction, but auto-related sales were up about 60% year over year.

Investors, on Wednesday, acted as if they realized this. Nvidia shares fell 0.5 percent on Wednesday. Shares in chip companies with major car franchises took it on the chin.

Shares of ON Semiconductor (ON), NXP Semiconductors (NXPI), Infineon Technologies (IFX.Germay) and STMicroelectronics (STM) fell 3.3%, 4.9%, 4.9% and 4.9%. Auto-related sales represent roughly 43% of 2022 sales for the quartet.

Investors in traditional auto stocks also didn’t like what Analog had to say. Shares in the retail giant Magna International (MGA) fell 3 percent. General Motors (GM) and Ford Motor

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The (F) shares fell 3.4% and 3.3% respectively.

Few companies heavily involved in the car industry escaped unscathed on Wednesday.

Write to Al Root at

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