The harsh response to an earnings report from Marvell Technologies (MRVL) is one of the reasons for Nasdaq (QQQ) entering correction territory. MRVL stock fell by nearly one-fifth of its value, closing at $72.22 on Thursday.
Although Marvell’s strong results and forecast on AI revenue met expectations, the stock market environment is not favorable.
Market pundits may blame the fog of war created by Trump tariff uncertainties. In February, the President delayed tariffs against Mexico and Canada by a month. But earlier this week, he declared they would proceed, only to walk back on them again. Whether it is on or not, tariff threats already caused customers to cancel orders or cut back on purchases.
In response, the magnificent seven stocks pulled the S&P 500 (SPY) and Nasdaq lower.
Broadcom (AVGO) led the decline, down by 6.33%. Nvidia (NVDA), Meta (META), and Amazon (AMZN) also fell. Alphabet (GOOG) and Microsoft (MSFT) managed to limit their drop by less than one percent.
AVGO stock will trade higher this morning. Broadcom posted a 25% rise in revenue in the first quarter.
The financial services sector dropped. Markets expect the economy to slow down in the quarters ahead. Citigroup (C) fell more than Bank of America (BAC), Wells Fargo (WFC), and JP Morgan (JPM). Asset managers fared worse. Blackstone (BX) and Apollo (APO) lost more than 4.0%.
Your Takeaway
Be wary of speculating on AI-related names that have a weak business model. Bigbear.ai (BBAI) and Rigetti (RGTI) have the most downside ahead.
