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Luke Kawa

JPMorgan said Marvell’s management told them their Microsoft and Amazon custom chip business is on track, contradicting other reports

The latest release from the Marvell Chipematic Universe is out:

JPMorgan analyst Harlan Sur hosted a meeting with Marvell Technology President and COO Chris Koopmans and Senior VP of Investor Relations Ashish Saran on Monday amid reports that the chip company was poised to lose business from its two biggest hyperscaler custom chip clients: Amazon and Microsoft.

Benchmark downgraded the company on Monday, citing a loss of Trainium3 and 4 business, while The Information said on Friday the latter was planning on shifting its business to Broadcom. Shares tumbled 7% on Monday, erasing all of its post-earnings bounce, and are down again on Tuesday.

The message communicated to Sur from Marvell is, in short, one of Vince Vaughn’s quotable lines in “Wedding Crashers”: “Erroneous! Erroneous on both counts!”

“At our meeting yesterday, the Marvell team reiterated securing purchase orders for all of CY26 for the next-gen Trainium 3 XPU ASIC program at AWS and that the Microsoft 3 nanometer Maia AI XPU ASIC program remains on track to ramp back-half of calendar year 2026 and into calendar year 2027,” Sur wrote in a note to clients on Tuesday. “Moreover, the team reiterated that they are already working on next-gen 2 nanometer XPU programs for both customers.”

The analyst maintained a $92 price target and “overweight” rating on the shares.

Sur added that Marvell’s management “remains perplexed/frustrated at all of the ‘noise’ in the market.”

This whole thing is starting to have the feel of a three- to four-episode subplot arc from HBO’s “Billions.”

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Luke Kawa

Sterling Infrastructure spikes as management hikes profit guidance by 42% on data center building boom

Sterling Infrastructure is going parabolic on Tuesday after delivering blowout Q1 results that prompted management to significantly revise up its full-year view.

Q1 sales beat estimates by nearly 40%, with adjusted EBITDA exceeding the consensus call by almost 50%.

As such, the firm boosted the midpoint of its full-year guidance for sales by 20% and its adjusted EBITDA by 42%.

The construction company’s E-Infrastructure Solutions business is on fire thanks to the data center boom, posting revenue growth of 174% with its signed backlog also up 123% versus the same quarter a year ago.

“We’re in the early innings, but the projects are extremely big, they’re coming out extremely quickly,” CEO Joseph Cutillo said on the conference call. “And we see not only this year, next year, but what our core customers and key customers are talking about starting ’28, ’29.”

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Helena Cheng

PayPal tumbles as management warns of weak 2026 trends, says turnaround plan will take “a few months” to define

PayPal reported Q1 results that were modestly ahead of analyst estimates, but shares sank after management warned of seeing trends at the “low end” of its full-year guidance.

Key numbers:

  • Adjusted earnings per share of $1.34 (compared to analyst estimates of $1.27).

  • Revenue of $8.4 billion (estimate: $8.1 billion).

Management plans to cut costs and jobs, with new CEO Enrique Lores aiming to engineer a turnaround for the payments company, whose stock was down double digits this year heading into the report.

PayPal is seeking to accelerate its adoption of AI to cut costs and generate at least $1.5 billion in savings over the next two to three years, according to a statement on Tuesday. Per Bloomberg, PayPal is targeting a workforce reduction of about 20%.

“We need to recommit to the fundamentals. That includes becoming a technology company again,” Lores said during the conference call, adding that it “will take a few months to completely define our new plan.”

markets
J. Edward Moreno

Coinbase CEO: Company cutting 14% of employees

Coinbase CEO Brian Armstrong said the company is cutting 14% of its workforce, citing volatile crypto markets and artificial intelligence, saying he is “rebuilding Coinbase as an intelligence, with humans around the edge aligning it.”

The cuts will impact about 700 employees and will be “substantially complete in the second quarter of 2026,” the company said in a regulatory filing. The restructuring will cost up to $60 million.

Armstrong said Coinbase will have fewer layers of management and lean heavily on AI. He said that engineers and nontechnical workers at Coinbase have been able to enhance their work with AI already.

The move comes as the company is scheduled to report earnings results on Thursday. The crypto bear market has been a headwind for the company in recent quarters, with analysts expecting the company’s Q1 profits to decline by 58% year over year.

Shares rose as much as 8% in premarket trading after the announcement. The company is down over 14% since the start of the year through yesterday’s close.

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markets
Helena Cheng

Cummins rises after power systems division delivers record results, management boosts full-year outlook

Shares of Cummins are higher in early trading on evidence that the 107-year-old engine maker is carving out a role as an AI infrastructure company.

While its headline Q1 results were nothing to write home about, its power systems segment — which makes generators — posted record-breaking performance fueled by data center demand.

Management boosted its full-year sales growth outlook to a range of 8% to 11% (up from 3% to 8%) and said its full-year EBITDA would be up 17.8% to 18.5% (up from 17% to 18%). Analysts had expected growth at the bottom end of this updated range.

“Demand for data center power generation across a range of our products continues to outpace expectations,” said Cummins CEO and Chair Jennifer Rumsey, who added that North American truck markets look to be improving from a “cyclical low.”

markets
Max Knoblauch

Frontier sinks as high fuel costs dampen record Q1 revenue, weigh on Q2 earnings guidance

Budget airline Frontier reported its first-quarter results before markets opened on Tuesday. Its shares fell more than 5% in premarket trading.

For Q1, Frontier reported:

  • An adjusted loss of $0.30 per share, compared to Wall Street estimates of a $0.36 loss per share, per analysts polled by FactSet.

  • $1.07 billion in revenue, compared to the $1.05 billion consensus estimate.

  • $268 million in fuel expenses, up 13% from last year. Like the rest of the industry, Frontier has been rocked by higher fuel costs.

Looking ahead, Frontier guided for a second-quarter adjusted loss of between $0.60 and $0.45 per share, deeper than the estimates of a $0.31 loss per share. Frontier said it expects to pay $4.25 per gallon of jet fuel in Q2, up about 48% from Q1.

Frontier shares closed up more than 10% on Friday on reports that rival Spirit would likely cease operations over the weekend. Following Spirit’s shutdown, Frontier climbed more on Monday. The carrier has the most direct route overlap with Spirit of any airline — though it may not benefit from its rival’s downfall as much as larger rivals with more premium ticket exposure.

A group of budget carriers including Frontier has sought $2.5 billion in government assistance to help sustain operations amid higher fuel costs. Following Spirit’s collapse, US Transportation Secretary Sean Duffy said he doesn’t think it’s necessary.

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