Here’s Our Game Plan for Applied Materials and Marvell

We have noticed more than a few questions and comments about shares of Applied Materials (AMAT), and odds are there are some similar ones out there about Marvell Technology (MRVL). Comments have ranged from “getting crushed” to when might we put more capital to work. We’ve talked before about challenging periods like this when market expectations are being reset and that extends to valuations, even if the demand profile remains better than favorable.

While the current environment has been painful, the reality is the Pro Portfolio’s positions in both AMAT and MRVL remain nicely profitable, and when we look ahead, we see rising production levels. That’s for semi-cap equipment as well as AI, data center and networking chips, and that means we are inclined to remain owners of both stocks as well as Broadcom (AVGO) shares, which have fared far better of late than AMAT and MRVL.

In terms of what we are looking to see before putting some additional capital to work in MRVL and AMAT, because the demand profile is vibrant, the market mood has us examining key support levels for them as well as for the Nasdaq Composite.

As you can see below, the Nasdaq Composite flirted with its 100-day moving average Tuesday. If it closes above that level today, that could be viewed as encouraging, but we also know we have quarterly results Wednesday and Thursday from Microsoft (MSFT), Meta (META), Apple (AAPL), and Amazon (AMZN). If the Nasdaq Composite can hold that support level through those earnings, we would be incrementally bullish.

With that in mind, we are closely tracking the technical set ups for Applied Materials and Marvell. For AMAT that means keeping a close eye on the shares relative to their 100-day moving average near $459 and watching for a positive test of that support level. We’d also like to see an inflection in the MACD indicator.

With Marvell, the shares have collapsed nearly 45% from their June high, and we’ve used the pullback to pick up some shares along the way. Now we are watching them against their 100-day moving average near $183. If they close below that level Tuesday, as Bob Lang explained last week, we will look to see if they deliver a positive test of that support over the next few days.

Remember, Marvell counts Microsoft, Amazon, Meta, and Alphabet (GOOGL) as custom AI silicon customers. That means higher capital spending levels should be an added tailwind for that business as well as for networking chip demand. Similar to our comments above about the Nasdaq Composite and earnings from Apple, Microsoft, Meta, and Amazon over the next few days, if MRVL shares can hold that support level, that would be a very good sign.

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMAT, AMZN, AVGO, META, MRVL, and MSFT.