Good morning. QQQs +67bps are rallying following two impt macro events: 1) Israel’s strike against Iran seen as more measured and restrained than anticipated and many feel it will help deescalate tensions in the regions (Oil is -6% this morning) and 2) country’s political turmoil following the Sunday election could give the BOJ pause in considering additional policy tightening steps (JPY is down vs USD as Japanese stocks spiked) (h/t VitalKnowledge).
Big earnings week this week. @scroogecap on X posted a nice earnings sheet cheat from Jefferies. We’ll have recaps all week.
Lots to get to this morning…
AVGO/MRVL: Jefferies cuts near-term #s in AVGO but sees Upside after that / Raises #s on MRVL
Jefferies says they are bringing down their AVGO #s into 1H’25 while keeping ‘26 and beyond the same as commentary suggests more seasonality than is currently modeled by the street and calls out the headwinds: 1) Temporary ASIC slowdown: Current lull in TPU v5 production. TPU v6 production expected to begin ramping April/May. Timing slightly later than market expectations, though not technically delayed 2) Expected seasonal softness in non-AI product lines 3) Production volume reductions anticipated and risk of losing iPhone WiFi chip socket ($4-5 per unit impact)
Separately on AVGO this morning: AVGO: VMware customers report massive price increases since Broadcom takeover: 'Feels quite a bit like being held for ransom' – Business Insider
On MRVL, Jefferies calls out the approaching inflection point in MRVL’s ASIC ramp. They see “a stronger ramp of the Trainium 2 chip to as high as 250k in April 25 with Inferentia 2.5 adding another 1M units in 2025.” This points MRVL’s AI ASIC revenue to be in the $2.5-3B range for CY25 with optical adding another $1.5-2B which all in is $4-5B range for AI vs the >$2.5B guide.
3P Roundup:
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