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Luke Kawa3/6/25

Broadcom soars after earnings beat, sunny revenue guidance

Broadcom reported better-than-expected profits and a revenue outlook to match, sending shares sharply higher in after-hours trading.

For its fiscal first quarter, the chip designer booked earnings per share of $1.60, $0.10 above the consensus estimate, along with a positive surprise for its adjusted gross margin of 79.1%. (Nvidia, on the other hand, is showing signs of softness in this metric.)

AI sales were big for Broadcom in the quarter: at $4.1 billion, this trounced the consensus estimate of $3.73 billion by about 10%.

“We expect continued strength in AI semiconductor revenue of $4.4 billion in Q2, as hyperscale partners continue to invest in AI XPUs and connectivity solutions for AI data centers,” CEO and President Hock Tan said.

But with the market taking a what-have-you-done-for-me-lately approach to AI names, it’s the second-quarter guidance that’s really fueling a bid for the stock. Broadcom anticipates generating about $14.9 billion in revenue versus the consensus estimate of $14.6 billion. The adjusted EBITDA guidance of about $9.93 billion for Q2 also came in $200 million above the Street’s expectations.

Shares had sold off hard on Thursday ahead of the report, as Marvell Technologies — which also sells customized advanced semiconductors to the hyperscalers — posted underwhelming guidance after the close on Wednesday.

It’s been a while since we’ve seen an unabashedly positive market reaction to semiconductor earnings!

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Old electronic items tossed on ground for disposal, Hudson

Technology giants don’t look like they used to, as the asset-light era fades

Oracle and Meta are now some of the most capital-intensive businesses in the S&P 500, spending more than energy giants. I guess data really is the new oil?

David Crowther5m

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Matt Phillips34m

Space stocks rip amid speculation on Altman joining race

Space stocks AST SpaceMobile, Planet Labs, and Rocket Lab all soared Thursday amid a recovery in the high-beta momentum class of shares coveted by some retail traders.

(High-beta momo stocks are basically shares that have been on a winning streak for a while, and tend to go up a lot more than the overall market on positive days. Goldman Sachs includes all three of the aforementioned space stocks in its themed basket of such shares.)

There’s little other fundamental news out there on the companies themselves.

But a Wall Street Journal report that OpenAI impresario Sam Altman has been toying with the idea of entering the space industry, potentially standing up a rival to Tesla CEO Elon Musk’s Starlink satellite service, may also be contributing.

As we’ve mentioned elsewhere, sometimes these stocks seem to trade on a what’s-bad-for-the-Musk-empire-is-good-for-us-and-vice-versa vibe.

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Matt Phillips2h

Intel sinks on news it will hang on to networking unit

Intel dropped in early trading Thursday after it disclosed plans to retain ownership of its networking unit following a strategic review of operations.

The unit, known as NEX, makes products like infrastructure processors, which do needed “housekeeping” tasks like running security checks, thereby freeing core Intel CPUs to do the higher-value operations. It also produces switches and controllers that manage and direct the flow of data to CPUs.

Intel Shelves Plans to Sell Networking Division After Review

Intel Shelves Plans to Sell Networking Division After Review

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Quantum computing stocks soar on return of bullish options bets

The calendar says December, but the price action is starting to look a lot more like September to me:

Quantum computing companies IonQ, Rigetti Computing, and D-Wave Quantum are all up at least 7% as of 11:04 a.m. ET, buoyed by a wave of bullish options activity.

Nearly 50,000 calls in IonQ have already changed hands, well above the 20-day average for a full session, with activity concentrated in strikes from $50 to $55 in contracts that expire between Friday and mid-January. Its put/call ratio is near 0.2, versus an average of over 1 for the past 20 sessions.
More than 65,000 calls have traded in Rigetti, a hair shy of its full 20-day average. Like IonQ, options activity has a bullish tilt, with a put/call ratio of about 0.7 versus a 20-day average of roughly 1.2.
D-Wave, which received positive commentary from Evercore ISI on Wednesday, isn’t seeing call activity as elevated as its peers, but the options action is also very skewed toward the bull side, with a put/call ratio of less than 0.3 versus a 20-session average of 0.7.

Pure-play quantum computing stocks nearly doubled from late August to late September amid heavy options market activity thanks to reports on government support for the sector, M&A activity, tech breakthroughs, and a flurry of price target hikes by Wall Street.

Retail traders are killing it this year because of both what they’re buying and when they bought it

Buy the dip. Buy AI. Buy gold.

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