Luke Kawa3/26/25

US stocks swoon as AI trade takes a beating

A double whammy of negative AI headlines and tougher tariff talk sank stocks on Wednesday.

The S&P 500 fell 1.1%, the Russell 2000 gave back 1%, and the tech-heavy Nasdaq 100 slumped 1.8%.

Tech was the worst S&P 500 sector ETF, down 2.2%, while consumer discretionary fell more than 1%. Staples was the biggest gainer.

TD Cowen analysts, whose report on Microsoft’s dimming demand for data center projects last month weighed on AI infrastructure and energy names, said that the company had walked away from 2 gigawatts’ worth of data centers. The bottom of the S&P 500 leaderboard was a who’s who of AI-adjacent names: Super Micro Computer, Arista Networks, Vistra, Nvidia, Quanta Services, GE Vernova, and Monolithic Power Systems were all among the 10 worst-performing constituents on the day.

Meanwhile, President Trump pledged that auto tariffs are coming. Ford was relatively unbothered, while General Motors tanked.

On the other hand, some all-around good news for gaming:

GameStop was up double digits after posting its largest operating profit since Q4 2017 and announcing a tweak to its investment policy to allow the purchase of bitcoin.

Nintendo also rallied as Goldman Sachs resumed coverage of the company with a “buy” rating, expecting strong sales from its Switch 2 console.

Dollar Tree’s commitment to low prices is admirable: the company announced that it’s selling Family Dollar (which it bought a decade ago for $9 billion) for $1 billion.

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Alphabet's $80 billion equity raise is a signal that the AI party can continue

And the next round is on Google.

Dancing people in a disco club to the music

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J. Edward Moreno2h

Marvell soars after Nvidia CEO says it will be the “next trillion-dollar company”

Marvell Technology surged after Nvidia CEO Jensen Huang called the chipmaker, which it has a stake, in ⁠the next “trillion-dollar company.”

Huang made the comments at Computex week in Taipei on ‌Tuesday. It’s not the first vote of confidence for Marvell from the world’s most valuable company: Nvidia announced a strategic partnership with Marvell in March, saying that it has invested $2 billion in the company.

Marvell’s market capitalization as of Monday’s close was around $192 billion, meaning that Huang’s prediction would hinge on a more than 420% rally. Huang said computing is becoming increasingly disaggregated and distributed, creating a need for advanced connectivity, which is what Marvell specializes in.

“That's the reason why Marvell is so essential,” Huang said, standing on stage next to Marvell CEO Matt Murphy. “That's why you’re going to be the next trillion-dollar company.”

The stock rose 23% in premarket trading on Tuesday and is up more than 145% since the start of the year.

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HP Enterprise skyrockets on strong Q2 earnings and full-year guidance boost

HP Enterprise shares soared Monday afternoon following the enterprise software company’s Q2 earnings report, which detailed a blockbuster quarter.

The stock was up more than 30% — not a typo — after-hours.

Here are the numbers for Q2:

Revenue of $10.7 billion (compared to the analyst estimate of $9.78 billion, per FactSet).
Adjusted earnings per share of $0.79 (estimate: $0.53).

The company raised its guidance for the full fiscal year, saying it sees revenue growth of 29% to 33%, compared with its previous guidance for 17% to 22%. It also guided for adjusted EPS of $3.35 to $3.45 for the full year, up from the $2.30 to $2.50 it had estimated in its Q1 earnings release.

For its early fiscal 2027 guidance, HPE said it expects revenue to grow 8% to 12%, compared with analysts’ expectations for 5.5% growth. It also said it expects adjusted EPS growth of 12% to 16%, compared to analysts’ forecasts of a 13.5% rise.

Unlike HP, which makes consumer products like PCs and printers, HP Enterprise is primed to support the AI boom — specializing in cloud servers, data storage systems, and AI infrastructure. HPE has gained 90% since January.

Last week, competitor Dell saw a similarly rosy earnings report, which boosted its stock nearly 40%.

On Monday at Computex, HPE announced a new project with Nvidia: a new server powered by the semiconductor company. “Agentic AI has arrived, and it needs a new CPU,” said Nvidia CEO Jensen Huang. According to the companies, the plan is to support and optimize the New York Stock Exchange’s day-to-day infrastructure with “industry leading agentic AI CPU performance, memory bandwidth and low latency.”

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Credo Technology tanks, despite beating on earnings and revenue for Q4

Credo Technology Group shares cratered in after-hours trading after releasing Q4 earnings after the bell, despite crushing analyst expectations for earnings and revenue.

The stock dropped 15% in after-hours trading.

For Q4, the company — which makes high-speed connectivity solutions for data centers — posted:

Revenues of $437 million (estimate: $431.8 million).
Adjusted earnings per share of $1.16 (estimate: $1.02).

And for the first quarter, the company estimated revenue ranging from $465 million to $475 million, compared with analysts’ estimates for $461 million.

Shares of the company are up 63% year to date, and hit their all-time high of $247 today.

Shares soared earlier in the month after Credo announced its acquisition of DustPhotonics, which makes silicon photonic integrated circuits for high-speed networking in data centers. The acquisition means that Credo will be able to play both ends of the data center connectivity business, by adding advanced photonics to its bread and butter of active electrical cables.

Credo stock was down over 14% in after-hours trading.

Tasha Matsumoto

Gains from semiconductor and software stocks send S&P 500, Nasdaq 100 to new record closes

An Nvidia-fueled tech rally powered stocks to new records, though market breadth was weak as only the information technology and energy sectors rose.

CHICAGO, IL - JANUARY 14: Chicago Bulls mascot Benny the Bull during a game against the New Orleans Pelicans and the Chicago Bulls on January 14, 2025 at the United Center in Chicago, Illinois.

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