Stocks Give Back Gains as Iran Retaliates Against U.S. Bases
It seems the stock market is anticipating some volatility ahead.
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Stocks are giving back their earlier gains on Monday following reports that Iran launched six missiles toward a U.S. air bases in Qatar and Iraq.
Ahead of this development, President Trump was expected to meet with his national security team at 1 p.m. ET, but now the market is remembering Trump’s warning that a response by Iran against the U.S. “will be met with force far greater” than what was used over the weekend. Earlier on Monday, Qatar closed its airspace due to concerns of a strike.
In our opening comments, we shared our expectations that Iran could launch a face-saving attack, but it is too soon to tell if that is what this is or if it’s the start of something more that could escalate tensions further.
Rest assured, we will continue to follow the developments and share our views with you, especially if we need to re-position the Pro Portfolio. With just over 14% of the Portfolio’s assets in cash, we have a nice buffer and, depending on what happens, a nice source of funds to be opportunistic.
Why Marvell Is Trading Off
We are also seeing shares of Marvell MRVL trade off following its pronounced move higher after last week’s Custom AI Silicon event.
Following that event, we saw multiple MRVL price target increases from various Wall Street firms as folks recognized the multiple program wins booked by Marvell. Yet this morning, Melius upgraded the shares of AMD AMD to Buy from Hold with a fresh $175 target, citing the expected upswing in the GPU market given “a sustainable surge in inferencing.”
"Inferencing" refers to the operational phase of AI, where the model's ability to reason and draw conclusions is put to the test in real-world scenarios.
Exiting Marvell’s event last week, we shared our view that when we look out over the next several years, AI is a rising tide that will lift multiple semiconductor boats, and Marvell is one of them, as is Nvidia NVDA. If anything, we see the Melius AMD upgrade supporting that view as well as the more than 50 additional opportunities Marvell is tracking on top of its 18 different socket wins with Big Tech and emerging hyperscalers.
The cumulative move in MRVL shares from its early April lows to more than $75 following the company’s event is understandably leading some folks to take some profits. We will still have multiple opportunities to do so in the coming weeks, months, and quarters as AI chip demand rises and Marvell’s programs matriculate. Catalysts we are watching include AI chip company earnings as well as monthly revenue reports from Taiwan Semiconductor TSM, Foxconn and others.
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At the time of publication, TheStreet Pro Portfolio was long MRVL and NVDA.
