What Happened:
Shares of networking chips designer Marvell Technology (NASDAQ: MRVL) jumped 5.7% in the morning session after peer, Taiwan Semiconductor Manufacturing Company reported strong Q4'2023 results that exceeded Wall Street's revenue and EPS expectations. During TSMC's earning call, CEO C.C. Wei added, "2023 was a challenging year for the global semiconductor industry, but we also witnessed the rising emergence of generative AI-related applications, which TSMC as a key enabler." Looking ahead, the company expects revenue to grow in the low-to-mid 20% range in 2024, supported by "strong demand for nanometer technologies and robust AI-related demand." This suggests a possible turning point for the semiconductor sector as we approach the upcoming earnings season, considering the challenges observed toward the end of 2023. After the initial pop the shares cooled down to $68.56, up 4.9% from previous close.
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What is the market telling us:
Marvell Technology's shares are very volatile and over the last year have had 21 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago, when the company gained 6.1% as investors bought the dip with the technology sector, which lost 4%, as yields fell. The yield on the 10-year Treasury yield, meanwhile, lost nearly 4 basis points. Other than potential positioning and a bounce after a losing week, there was nothing more specific. During the week, traders were expected to get greater clarity into the path of rate cuts from the central bank.
Marvell Technology is up 17.7% since the beginning of the year. Investors who bought $1,000 worth of Marvell Technology's shares 5 years ago would now be looking at an investment worth $4,057.
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