Top 10 Things to Watch: Marvell, Nvidia, HPE, Alphabet, and More

My top 10 things to watch Tuesday, June 2

1. Marvell Technology is flying over 20% this morning after Nvidia CEO Jensen Huang said at Computex that the networking supplier and custom AI chip designer could be the next trillion-dollar company. Marvell ended yesterday with a market cap of $192 billion. The stock is up over 150% in the past three months during the AI chip rally.

2. Nvidia invested $2 billion into Marvell back in March, and the companies are working together on optics technology to replace more copper in data centers. We're seeing big moves in optical stocks. Lumentum up 7%. Coherent up 4.5%. Club name Corning is up 5%, and is the one to buy.

3. No quit in Club name Arm Holdings . Shares edged higher after CEO Rene Haas told Bloomberg News that he's hopeful Arm's new AGI CPU will reach its $15 billion sales target ahead of its initial 2031 target. "Demand has been stronger than we anticipated," Haas said. Securing sufficient manufacturing capacity is critical to reaching these ambitions.

4. Hewlett Packard Enterprise delivered a blowout, sending the stock up over 25%. The kind of quarter I would have expected next year. First Dell , now HPE. Demand for servers is red hot thanks to AI, but not just in the cloud. The traditional enterprise server business is booming as customers modernize infrastructure. HPE's acquisition of Juniper Networks, which closed last summer, is proving to be a good deal. Loop Capital upgraded it to buy from hold. Price target of $75, up from $23.

5. SK Hynix plans to double its wafer capacity over the next five years, according to the chairman of the South Korean memory giant's parent company. Soaring demand and tight supply have sent memory prices soaring and turned the memory group into a market-leading trade. Could SK Hynix's ambitions derail that? Not this morning, at least, with rival Micron higher.

6. Alphabet announced a surprising $80 billion equity offering to primarily fund its AI buildout. Berkshire Hathaway committed to $10 billion in a private placement. Half of the $80 billion total will be raised through at-the-market offerings beginning in the third quarter. That likely puts a lid on this Club stock, which is down almost 3% on the news. I've been worried about blockbuster IPOs adding excess supply to the market. Now this. Too much supply all at once.

7. Big call from Goldman Sachs. Downgraded Intuit to a sell from hold with a price target of $276, down from $519. Analysts are worried about heightened competition for TurboTax, and said consensus estimates are too high. Plus, there are real issues with Mailchimp, its email marketing platform. The stock is down over 6%. Intuit said last month it planned to lay off 17% of its workforce.

8. Take-Two Interactive was started with a buy at Piper Sandler. Analysts pointed to "unprecedented demand" for the long-delayed release of Grand Theft Auto VI, which is finally expected to hit shelves in November. Piper also issued a price target of $280 on Take-Two, implying 23% upside from yesterday's close.

9. UBS downgraded Sherwin-Williams to hold from buy, saying the paint maker lacks a catalyst due to the sluggish housing market, and that a turn appears further out. Bad news for Club name Home Depot , which has been our way to play an eventual fall in mortgage rates. Hasn't happened yet despite Fed cuts. But, as I said during our May Monthly Meeting, I don't want to give up on this hedge yet because who knows when the turnaround will materialize.

10. Truist initiated FedEx Freight with a hold. We like it and are keeping it for the Club. It's inexpensive and starved. I spoke to freight CEO John Smith, and self-driving trucks are ready. This could be a real solution to driver issues. FedEx Freight began trading as an independent company yesterday after its split from FedEx, which we also own. Susquehanna upgraded its trucking peer Knight-Swift to buy from hold.

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