Stocks often fall in sympathy after a rival or peer's disappointing earnings. But sometimes that reaction is flawed.
Optical networking companies Lumentum and Coherent are doing just that ahead of the open Friday, slipping alongside Marvell Technology. Memory names Sandisk, Micron and Western Digital were also down.
Yes, they are red-hot momentum plays and volatility comes with the territory. But Marvell's numbers point to the relentless AI boom showing no signs of stopping. The company, which designs custom chips and supplies optical networking technology, did everything right. It's only problem is that the stock has jumped 184% this year, heading into earnings.
Marvell is at the heart of the great AI date-center buildout. And it's thriving. Its data center revenue jumped 46% in the second quarter and CEO Matt Murphy said he expects revenue growth to accelerate further through the rest of the year.
Analysts expect data center revenue to grow 69% in the third quarter and 85% in the fourth quarter.
Coherent and Lumentum have also had a strong year, up 60% and 159% respectively through Thursday's close. Marvell stock may be struggling today but that its own problem.
There's no room for sympathy in the volatile AI trade.
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