Semiconductors melt in wake of Powell heat, Marvell's soft guidance
jiefeng jiang


Semiconductor stocks fell sharply on Friday in the wake of hawkish comments from Federal Reserve Chairman Jerome Powell, as well as weak guidance from Marvell Technology (NASDAQ:MRVL).
Marvell (MRVL) fell more than 7% to $50.94 after it reported second-quarter results on Thursday that Morgan Stanley analyst Joseph Moore described as "solid... all things considered," while adding that certain trends in the data center business caused some anxiety.
"We had expected a mixed quarter, given inventory excess in hard disk drive and networking, with supply/demand approaching equilibrium in those markets, and we expected cloud to be strong," Moore wrote in a note to clients, adding that the overall numbers look mostly like what was expected, but with a slightly different composition. 
Moore also pointed out that supply chain issues are still resolving themself and lead times are coming down, but new challenges have emerged, especially in the data center, largely due to supply.
"Our general expectation is that hyperscale can resume growth - albeit more slowly, next year - while there will continue to be some headwinds on the on premise side," Moore continued. 
"In general, parsing supply and demand issues at this point becomes somewhat challenging, as we have just seen in consumer markets (where smartphone and PC decelerations started out as a supply problem)."
Following Marvell (MRVL) lower were peers Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD), which fell 5.5% and 3.5%, respectively.
Other chip makers including Intel (INTC), Qualcomm (QCOM), Micron (MU) and Broadcom (NASDAQ:AVGO) also looked to end the week on a lower note, each declining more than 3%.
Broadcom (AVGO) is slated to report third-quarter results next week, and analysts estimate the company will earn $9.55 per share on $8.41B in revenue.

Ahead of earnings, Wells Fargo said last week that it's possible Marvell Technology's (MRVL) backlog may have peaked, adding that the company is "not immune" from macro challenges.