As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the hardware & infrastructure industry, including IonQ (NYSE: IONQ) and its peers.
The Hardware & Infrastructure sector will be buoyed by demand related to AI adoption, cloud computing expansion, and the need for more efficient data storage and processing solutions. Companies with tech offerings such as servers, switches, and storage solutions are well-positioned in our new hybrid working and IT world. On the other hand, headwinds include ongoing supply chain disruptions, rising component costs, and intensifying competition from cloud-native and hyperscale providers reducing reliance on traditional hardware. Additionally, regulatory scrutiny over data sovereignty, cybersecurity standards, and environmental sustainability in hardware manufacturing could increase compliance costs.
The 10 hardware & infrastructure stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 32.2% since the latest earnings results.
IonQ (NYSE: IONQ)
Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE: IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.
IonQ reported revenues of $11.71 million, up 91.8% year on year. This print exceeded analysts’ expectations by 15.9%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
IonQ achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 37.6% since reporting and currently trades at $22.10.
Is now the time to buy IonQ? Access our full analysis of the earnings results here, it’s free.
Best Q4: Pure Storage (NYSE: PSTG)
Founded in 2009 as a pioneer in enterprise all-flash storage technology, Pure Storage (NYSE: PSTG) provides all-flash data storage hardware and software that helps organizations manage their data more efficiently across on-premises and cloud environments.
Pure Storage reported revenues of $879.8 million, up 11.4% year on year, outperforming analysts’ expectations by 1.2%. The business had a satisfactory quarter with an impressive beat of analysts’ EPS estimates but billings in line with analysts’ estimates.
Pure Storage delivered the highest full-year guidance raise among its peers. The stock is down 37.6% since reporting. It currently trades at $38.99.
Is now the time to buy Pure Storage? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: CompoSecure (NASDAQ: CMPO)
Pioneer of the luxury metal credit card that's in the wallets of affluent consumers worldwide, CompoSecure (NASDAQ: CMPO) designs and manufactures premium metal payment cards and secure authentication solutions for financial institutions and digital asset storage.
CompoSecure reported revenues of $100.9 million, flat year on year, falling short of analysts’ expectations by 1.6%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 21.2% since the results and currently trades at $9.46.
Read our full analysis of CompoSecure’s results here.
Xerox (NASDAQ: XRX)
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Xerox reported revenues of $1.61 billion, down 8.6% year on year. This print surpassed analysts’ expectations by 2.9%. Aside from that, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates.
Xerox had the slowest revenue growth among its peers. The stock is down 62.9% since reporting and currently trades at $3.61.
Read our full, actionable report on Xerox here, it’s free.
Super Micro (NASDAQ: SMCI)
Founded in Silicon Valley in 1993 and known for its modular "building block" approach to server design, Super Micro Computer (NASDAQ: SMCI) designs and manufactures high-performance, energy-efficient server and storage systems for data centers, cloud computing, AI, and edge computing applications.
Super Micro reported revenues of $5.68 billion, up 54.9% year on year. This result lagged analysts' expectations by 3.5%. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ operating income estimates.
Super Micro had the weakest performance against analyst estimates among its peers. The stock is down 28% since reporting and currently trades at $32.79.
Read our full, actionable report on Super Micro here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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