Stock Market Update

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.3%), and DJIA (+0.1%) are off their session highs as the information technology sector (-0.9%) comes under pressure, with particular weakness across semiconductor stocks.

Marvell (MRVL 216.80, -24.65, -10.21%) is one of the worst-performing S&P 500 components today following its Q2 (Jul) results, as investors appeared to want more upside after the stock's 40%+ rally since late July. While Q2 revenue grew 36.5% yr/yr to a record $2.74 billion and Q3 guidance was above consensus at the midpoint, EPS upside was modest, and gross margin is expected to contract slightly in Q3. Importantly, however, Marvell raised its FY27 revenue outlook to $12 billion (+45%) from $11.5 billion and FY28 revenue guidance to $18 billion (+50%) from $16.5 billion (+45%), reinforcing the increasingly bullish long-term AI infrastructure story. Marvell's results reinforce the strength of its AI infrastructure opportunity, but the near-term reaction reflects elevated expectations rather than a fundamental deterioration in the story. After the stock rallied more than 40% since late July and following NVIDIA's (NVDA 220.76, -7.22, -3.17%) strong quarter this week, investors were likely looking for more upside in Q2 and a clearly above-consensus Q3 outlook. That said, the more important takeaway is the significant improvement in Marvell's longer-term outlook, with FY27 and FY28 revenue targets both raised materially.

The PHLX Semiconductor Index is now down 3.5%.