Steve Madden steps up as Citi upgrades stock on a Y2K fashion rebound

Big Blue fell in after-hours trading despite reporting better-than-expected Q1 results, as it didn’t include an internal metric it typically discloses to track the progress of its AI business in the release. IBM reported: 

• Q1 revenue of $15.92 billion vs. the $15.63 billion FactSet consensus estimate.

• Adjusted earnings per share of $1.91 vs. the $1.81 consensus expectation.

• Sales of $7.05 billion at its key, high-margin software segment vs. a $6.98 billion consensus of nine analyst estimates.

• Sales of $3.33 billion in its infrastructure unit, which houses its growing AI mainframe business, vs. a $3.13 billion consensus estimate.

Unlike recent earnings statements, the company made no mention of an internal metric it used to track its progress in AI, which it called its "generative AI book of business.” That metric stood at $12.5 billion at the end of 2025, per the company.

The infrastructure business is of acute interest to the market, after AI giant Anthropic announced in February that Claude Code could efficiently modernize code bases in the COBOL programming language, which serves as a cornerstone of IBM’s enterprise mainframe business. The language is still widely used in certain industries, such as airlines and finance. (ATMs, for instance, run almost entirely on COBOL.) 

Anthropic’s COBOL announcement cut the legs out from under IBM. The stock plunged 13% on February 23, the day of the announcement — its worst daily drop in more than 25 years. And it was down roughly 15% for the year through the end of trading Wednesday.

The iShares Semiconductor ETF took a brief leg lower after TSMC said that it would not deploy ASML’s most advanced machines for chip making through 2029 in a bid to save money.

Per Bloomberg, TSMC’s co-COO Kevin Zhang told reporters that ASML’s new offerings (high-NA EUV, for short) are “very, very expensive,” costing about $410 million.

Nonetheless, the Philadelphia Semiconductor Index (the basis for SOXX) is still poised to end the day by extending one record (for consecutive record closes) and setting another (for consecutive gains):

TSMC climbed to fresh highs after a brief blip. The foundry giant reported far better than expected profitability in its Q1 results last week, and delaying upgrading this equipment may be a sign of continued cost discipline to protect margins over time.

ASML fell as much as 4%, but pared losses to about 1% as of 3:19 p.m. ET.

Given TSMC’s stature in the industry, a couple thoughts:

a) You’d think TSMC would be the best-place to absorb any short-term cash flow hits from buying this more expensive equipment.

b) It doesn’t seem like the outputs of ASML’s most advanced technology will be ubiquitous until TSMC adopts their machines, given how prominent the Taiwanese company is in the foundry world.

Shares of POET Technologies are continuing their parabolic surge after CFO Thomas Mika confirmed to StockTwits that the company would be booking revenues from custom chip and networking specialist Marvell Technology.

“We’re a supplier to Marvell now that they’ve acquired Celestial AI who has been a customer of ours for a couple of years,” he said. “And what we supply to Celestial AI are light sources, high-bandwidth, multi-frequency, high-power light sources that light up the photonic fabric that Celestial AI talks about as being the communication device between GPUs and one GPU and another GPU, a GPU and a memory device.”

Mika also said “I hate shorts” when asked about Wolfpack Research’s bet against the company, and said that short sellers were “maggots.” Wolfpack alleged that Poet’s US-based investors would be exposed to an “IRS tax nightmare.”

Personally, this explanation strikes me as pretty thin gruel. We’ve known since early December that Marvell was buying Celestial AI, and that Celestial AI is a Poet customer. Indeed, the stock got to surge when the deal was announced for that very reason! I can confirm that the sky is blue, I don’t know if that should be considered a catalyst to bid up the atmosphere.

On the other hand, you could do worse for a thesis these days than, “Hey, everything in the AI infrastructure supply chain seems to have mooned at one point or another recently, maybe let’s look for some names that mooned in 2025 that haven’t had their time in the sun in 2026!”

Poet’s in the connectivity space, which has been on fire in 2026. But shares had been down year-to-date before more than doubling over the past nine sessions.

The company’s rally once again includes massively bullish options action:

On a related note, Navitas Semiconductor is up double digits today and nearing its closing high from October, the latest in a series of current conditions we’re flagging as being eerily reminiscent of the market backdrop six months ago. Navitas is up more than 80% over the past nine sessions.