VIDEO: What Wall Street Is Missing About Marvell
Chris lays the ground work for the coming week, explains why Wall Street is missing the opportunity with Marvell, and digs into our plan for Apple ahead of earnings.
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In today’s Daily Rundown video, Chris Versace lays the ground work for the coming week.
He also explains why Wall Street is missing the opportunity with Marvell MRVL and digs into our plan for Apple AAPL shares ahead of its earnings later this week.
Transcript
CHRIS VERSACE: Hey folks, Chris Versace here. It is Monday, April 29th. A rather quiet start to what is going to be a very busy week for not only us but for the market as well. We've kind of laid the groundwork for all of this in Friday's video as well as in Friday's rundown.
So I'm just going to quickly remind you that we've got a number of companies in the portfolio reporting. We've got the usual start of the month economic data, which we will be digging into to see if last week's initial first quarter GDP print was an aberration, which we think was the case, or perhaps we might need to rethink the pace of the economy.
I can say that the initial forecasts, both from the Atlanta Fed GDP Now model as well as Goldman Sachs, see a sharp rebound in the current quarter. Some of those numbers are north of 3% for GDP. So a big pop higher compared to that initial print. But again, we expect not only to see the initial first quarter GDP print get revised higher, but as we know with these initial forecasts, they're rolling and we will see a number of revisions as more data becomes available. That's exactly why we will be paying very close attention to this week's PMI reports for both manufacturing and services as well as the usual flow of employment data for start of the month and wage data. Because of course, inflation remains a hot topic.
Again, today is a little bit of a slow day. We did update our portfolio. That has earnings expectations across all of our holdings. And there were a number that were revised. But the one that I'll call out that wasn't revised, very surprising to me, was really Marvell. And when we think about this, last week what did we see? Well, Meta Platforms, Alphabet, Microsoft all talked about increasing their spending on AI and data center. That's right in the sweet spot for Marvell.
We did see EPS numbers get revised higher for '24, 2025 for Nvidia. Not really a surprise, given that announcement. But again, a little shocking that Wall Street did not kind of connect the dots and upgrade their earnings expectations for Marvell. I think that's going to happen. Remember, we have a couple of catalysts this week including earnings from Amazon, what they say about Amazon Web Services and their cloud spending. That could be a catalyst. But if not, more than likely, Wall Street's going to play catch up with Marvell's earnings expectations when they report in the coming weeks.
We, of course, continue to like Marvell very much, not only for their position in AI and data center, but for two other reasons. First, of course, they are the chip partner for Meta, Microsoft, and Amazon. That puts them in a very strong position. But also too, as AI continues to be adopted and we see the eventual AI upgrade cycle for devices, which is going to constrain networks, constrain carrier infrastructure, we should see a build up in spending on that front benefiting Marvell's other businesses. So we continue to like Marvell long term.
The other big earnings report this week, as you know, is going to be Apple. The shares are higher today. Bernstein did come out with an upgrade, which kind of interesting on the timing ahead of earnings. Their price target, $95. We're at $205. So you could say that we're a bigger believer in the Apple story longer term. But Bernstein's upgrade really stems on the potential promise of the upgrade cycle tied to AI. You know that we've been talking about this.
I do have, as you probably saw in the note out on this, we have some concerns about Apple's quarter. We would rather be buyers of Apple after they report kind of getting all the bad news out of the way and then really looking forward to WWDC in June where Apple should take the wraps off of their next iteration of software, talking about AI along the way. So that's really what we're waiting for there.
We continue to want to own more Apple shares ahead of that AI upgrade cycle. And again, if the shares pull back because of tepid or slightly-- results for the March quarter that are a little underwhelming relative to expectations, when we've seen that with other companies so far this earnings season, we've seen them pull back. That could be our opportunity for Apple shares.
Now, quick reminder, we are starting something new this week for the portfolio. We will be having office hours in the forum. The first one starts tomorrow, Tuesday, between 4:00 PM and 5:00 PM Eastern. I look forward to seeing you there. I'll be there answering your questions, bringing some other additional insights and thoughts along the way. So again, please join us, the forum tomorrow, 4:00 PM to 5:00 pm Eastern Standard Time. I look forward to it.
That is today's video. We will be having a busy week, folks. So remember, check your emails, check your alerts. We don't want you to miss anything, especially if we happen to make any additional moves with the portfolio. Thanks for watching.
At the time of publication, TheStreet Pro Portfolio is long MRVL and AAPL.
