International Business: Marvell sheds $17bn despite solid AI results

US stocks dipped slightly after Fed Chair Kevin Warsh's speech, which reinforced expectations of rate hikes to control inflation. The Dow, S&P 500, and Nasdaq ended the week with modest gains. Gap rose 12.9% on stronger-than-expected profits, while Marvell Technology fell 10.3% despite beating estimates, as gains were already priced in.

Marvell Technology (MRVL) shares fell 8% despite reporting record Q2 results with $2.739B revenue, up 37% YoY. The company raised fiscal 2027 and 2028 growth targets, citing AI-driven data center revenue growth. Analysts noted the stock's premium valuation and reliance on future Google deal revenue. MRVL trades at 59.52x forward earnings, with institutional ownership rising and short interest low. The stock's decline reflects investor impatience for immediate growth from the Google partnership,

Nvidia (NVDA) reported strong Q2 earnings and raised Q3 revenue guidance to $108B, driving its stock up 9% and boosting tech sector gains. Nasdaq, S&P 500, and Dow closed higher. Other notable movers include Okta (OKTA) +29%, Salesforce (CRM) +23%, and CrowdStrike (CRWD) +20%. Corporate profits surged $400B in Q2, partly due to $71B in tariff refunds.

Marvell reported Q1 revenue of $2.74B (+37% YoY), adjusted EPS of $0.94, and raised FY2027/2028 guidance to ~$12B/$18B. Despite strong results, shares fell due to delayed AI-driven revenue expectations, particularly from its Google deal. The stock had nearly tripled in 2023 before earnings.

Marvell Technology reported strong Q2 results with 37% year-over-year sales growth to $2.74 billion and raised fiscal 2028 guidance to $18 billion. The company's growth is driven by demand for custom chips, interconnect, and switching, with a long-term agreement with Google adding upside. Morningstar raised its fair value estimate to $300 per share from $270, citing higher medium-term growth expectations. Despite the positive outlook, shares fell 6% after hours.

Fed's Kevin Warsh's comments at Jackson Hole boosted rate-hike bets, increasing short-term Treasury yields to 4.35% and causing the S&P 500 to turn lower. The dollar rose, while gold prices fell. Marvell Technology's shares dropped 10% despite higher guidance and earnings, reflecting investor expectations for AI-linked companies. Brent crude futures traded at $88 a barrel.