stevmonson

Nobody puts gold in the corner.

[SkyGrove Research @_SkyGrove]

[ $MRVL Legacy Business Shows Signs of Recovery ]

1/ The recovery of Marvell's legacy business is becoming more visible. All divisions except the data center can be considered legacy businesses.

In Q2, the performance of Marvell's legacy business segments met or exceeded expectations from both the company and the market.

2/ During the Q1 earnings call, Marvell stated that Q1 would be the low point for legacy businesses, with a slight rebound starting in Q2.

Analysts somewhat accepted this estimate, but the market remained skeptical. This earnings report confirms the stabilization of legacy businesses.

3/ Comments from the earnings conference call also confirmed the visibility of legacy recovery.

Marvell explained that inventory adjustments in Enterprise Networking and Carrier Infrastructure have been completed, and they are seeing signals of demand recovery.

4/ Orders from Enterprise networking customers are expanding. In the Carrier Infrastructure business, demand for generational upgrades to OCTEON 10, the next-generation 5nm-based DPU product, is emerging through orders from multiple customers.

Growth in these two business segments is expected to be larger in Q4 than in Q3.

5/ The Consumer segment recovered to $89 million in Q2 sales (+112% QoQ), moving past the impact of customer inventory adjustments (game console manufacturers) from Q1. Marvell expects this recovered level to continue.

Future Consumer business is expected to center around SSD controller demand for game console customers.

6/ In the Automotive/Industrial business segment, inventory adjustments by automotive customers are still ongoing, but next quarter's sales growth is projected to reach mid-single digits QoQ. This suggests the worst phase has passed.

8/ Marvell also confirmed recovery trends in general data center-oriented storage products (SSD controllers) in the data center segment, which had been experiencing weak demand.

[Grant Williams @ttmygh]

So many places I’ve paused and reflected over the years. This may be my favourite:

[Brad Gerstner @altcap]

Long but solid update on the AI “air pocket” debate.

[Brad Gerstner @altcap]

It’s no mystery. The CA Dept of Insurance which sets auto rates for 12% of US drivers approved 25-30% rate hikes over last 2 yrs as many insurers left the state due to Prop 103. And bc CA is so big it influences rates across the country. Price setting does not fix inflation…

[Giuliano @Giuliano_Mana]

White Nights.
Crime and Punishment.
Brave New World.
1984.
Zen and the Art of Motorcycle Maintenance.

[Nightview Capital @NightviewCap]

Featured in The Nightcrawler this week:

GenAI: From Breakthroughs to Bottom Lines – via @RihardJarc

Key quote: “Cloud providers want as many GPUs as they can get, but there are not enough, and they are really expensive, as Nvidia has a monopoly right now. The solution for all the hyperscalers is the same: build your custom silicon. Each of the hyperscalers is now in the process of doing that. In my view, it is their most important area for the next 10 years. Each hyperscaler is in the process of chip build-out, but there are quite significant differences in the maturities of their offerings.”

https://t.co/qewOkAZX5H

[Ed Finley–Richardson @ed_fin]

🎶 “Tis the season,
for bear pooooorn” 🎶
(chorus)
🎶 “FALA–LALA–LAHHH
LALA, LA–LAHHHH” 🎶

[SkyGrove Research @_SkyGrove]

[ GS Trading Market Close Commentary: Melt Up ]

1/ The July PPI came in below expectations, improving investor sentiment. The tech-heavy NDX rose about 6.25% over four days, reaching its highest level in 15 months.

NDX also broke through the 100-day moving average, providing positive technical indicators.

2/ This rapid rise seems to stem from easing market anxiety and the absence of bad news, rather than economic indicator improvements.

Most sectors recorded gains, with IT sector sentiment notably improving. IT volume increased for nine consecutive days, indicating investors are expanding IT investments following a period of large-scale selling.

3/ The semiconductor and semiconductor equipment sectors saw buying pressure outweigh short-selling, while the software sector experienced strong buying.

On the GS desk, overall trading flow closed with a +304bps buying bias compared to the 30-day average of +32bps.

Long-only funds ended with $900 million in net purchases, driven by tech and macro product buying. Hedge funds closed with $600 million in net sales due to long-term consumer goods selling.

4/ Notably, hedge funds' short-selling ratio remains at about 30%, lower than the average of 50%.

[SkyGrove Research @_SkyGrove]

[ BofA's Hartnett: A Time of Struggle ]

1/ The prime rate, the lowest rate at which US small businesses can borrow, is at a century-high of 6.5%. The rise in real interest rates is slowly impacting US consumption and the labor market.

2/ Global rate cuts are no longer a question of "if" or "when," but rather "will they be effective?" Wall Street's narrative has not yet priced in a "Hard Landing" scenario, still favoring a "Soft Landing."

3/ The behavior of current stock leaders, SOX and the tech sector XLK, around their 200-day moving averages is crucial. If these break, a decline of about 10% to 2021 peak levels is expected.

4/ Key signals to watch:
- Housing: Mortgage purchase applications at their lowest since 1995, lowest refinancing rates, potential for further labor market deterioration.
- Small business sentiment: Depressed due to high funding costs, taxes, and regulations. A rebound could be a highly optimistic signal.

5/ Outlook:
- "Sell the 1st Cut".
- AI leadership may underperform in the second half until EPS growth materializes.
- Amid hard landing concerns and negative payrolls, heavily discounted global retail stocks might see a rebound, similar to REITs in recent months.

[SkyGrove Research @_SkyGrove]

[ $BE 2Q24 Earnings: Positive Outlook amid Guidance raise - Datacenter remains key driver ]

1/ Bloom Energy reported Q2 earnings that largely met consensus expectations, resulting in a 10% pre-market increase. The company slightly raised its guidance for the year.

2/ Management anticipates a substantial revenue increase in Q4. However, this projection introduces additional risk, considering the possibility of revenue recognition being pushed to 2025 due to project delays.

3/ The company reaffirmed its 2024 gross profit margin target of 28%. This implies a steep rise from 20% in the first half to 33% in the second half of the year.

4/ The earnings call focused on data center prospects. Bloom Energy is exploring various data center opportunities, ranging from single-digit megawatts to potentially hundreds of megawatts. Smaller data center deals typically progress faster than larger ones.

The company is currently evaluating several data center sites exceeding 100MW.

5/ The recent contract between Bloom Energy and Quanta Computer to power semiconductor manufacturing facilities highlights the importance of power supply timing for certain customers.

Similar non-data center clients are expected to continue driving growth for Bloom Energy.

[stevmonson @1stevvvvy]

Frequent sauna use (4-7 times/week) can lower all-cause mortality by 40%. Guidelines: 20 minutes at 174°F, 4-7 times per week.

[stevmonson @1stevvvvy]

Beam Therapeutics updates pipeline and Q2 2024 financials:

- FDA cleared IND application for BEAM-301 in Glycogen Storage Disease Type la (GSDIO).
- Over 20 patients enrolled and six dosed in BEACON Phase 1/2 trial of BEAM-101 for severe sickle cell disease.

[stevmonson @1stevvvvy]

Household debt levels are surging.

This could limit future consumer spending

and slow down economic growth.

[stevmonson @1stevvvvy]

Published two "Trading Alerts" confirming buys of two dominant companies.

Both declined significantly during the stock market pullback.

When the VIX is over 60 and CNN Greed & Fear shows "extreme fear", it's time to go shopping.

[stevmonson @1stevvvvy]

Since 1980, buying the S&P 500 index 5% below its recent high has yielded:

- Median return of 6% over the next 3 months
- Positive returns in 84% of cases

[Adrian @adrian__csc]

$TRI $TRI.TO "Big 3" segments

[Douglas A. Boneparth @dougboneparth]

According to the VIX, the worst market events of our lives were the 2008 financial crisis, COVID, and the Bank of Japan raising interest rates by a quarter percentage point.

[stevmonson @1stevvvvy]

Tyson Foods released its quarterly earnings:

- Revenue: $13.358B (+1.62% YoY), beats by $163M
- EPS: $0.87 (+480.00% YoY), beats by $0.23

[stevmonson @1stevvvvy]

Ares Management's quarterly earnings:

- Revenue: $726.11M (+16.78% YoY), missed by $95.21M
- EPS: $0.99 (+10.00% YoY), in line with estimates

[stevmonson @1stevvvvy]

Foxconn maintains there are no delay issues with the GB200 based on Nvidia reference designs.

The company plans to keep the Q4 supply schedule for customers as planned.