It's Thursday, and semiconductor stocks are on the move again. As of 10:45 a.m. ET, investors in the chips industry are seeing mobile chips leader Qualcomm (QCOM -0.55%) stock score a 3.6% gain after "beating" on earnings last night.

Meanwhile, semiconductor equipment maker ASML Holding (ASML -0.35%) is adding 4.1% and contract chips manufacturer Taiwan Semiconductor Manufacturing Company (TSM -0.63%) is tacking on 2.6%, in response both to positive news on semiconductors in general and to Qualcomm's bullish report in particular.

The good and bad news about Qualcomm

Let's start with Qualcomm. Heading into last night's Q4 2023 report, analysts had forecast Qualcomm would earn $1.92 per share (after backing out one-time items) on sales of $8.5 billion. In fact, though, Qualcomm earned an adjusted $2.02 per share, and its sales approached $8.7 billion.

Before you get to thinking this is "good" news, however...don't. It's just news that is less bad than feared.

Qualcomm, you see, may have beaten expectations on both the top and bottom lines, but its sales were still down 24% year over year in Q4, while its generally accepted accounting principles (GAAP) earnings declined twice as fast -- 48%. What's more, calculated according to GAAP, Qualcomm's profits were only $1.32 per share -- i.e. the "$2.02" profit that Wall Street is excited about was only a non-GAAP (adjusted) figure.

Q4 results were also weaker than full-year results at Qualcomm (indicating that business is still getting worse, not better). For the year, Qualcomm scored $35.8 billion in sales (down only 19% year over year) and GAAP profits of $6.42 per share (down 44%).

What's next for Qualcomm and other semiconductor stocks?

And yet...things may be looking up.

Turning to guidance, Qualcomm indicated that in Q1 2024, it may see sales of anywhere from $9.1 billion to $9.9 billion. The midpoint of that range being $9.5 billion, and Wall Street expecting only $9.3 billion in Q1 2024 sales, this suggests that the business environment may actually be starting to improve for Qualcomm. (The company also forecast earnings about $0.10 per share ahead of consensus).

And not just for Qualcomm.

Turning at last to our other two semiconductors gainers today, the same improvement in business that Qualcomm is forecasting for next quarter was also just highlighted in a Wall Street Journal article on semiconductor companies in general. After a "boom and bust," cycle, reports the Journal, "the worst is over for the chip industry [and] the global semiconductor industry is bottoming out."

In support of this thesis, the paper cited a better-than-expected earnings report from Intel last week, alongside a Samsung report that chips demand is "getting back to normal inventory" levels -- which would imply a halt to declines in sales numbers. Citing a report from semiconductor industry consulting firm International Business Strategies, the Journal even predicted 11% growth in sales next year.

If this is truly the case, then as the most popular maker of semiconductor chips for other companies, such a revival of chips demand would obviously benefit Taiwan Semiconductor. And farther up the semiconductor supply chain, greater production of chips at TSM (and others) would imply greater demand for machines to manufacture chips -- so good news for ASML as well.

But as the saying is, it's hard to make predictions, especially about the future. And given its P/E ratio of nearly 30, I'm not 100% certain the time has yet come to be buying ASML shares hand over fist. But with Qualcomm stock selling for a low 14.5 times earnings today, and Taiwan Semi not much more expensive at 16.9 times earnings, now might be a propitious time to start tip-toeing back into the semiconductor sector and picking up some shares of the cheaper opportunities.