Intel, Arm Holdings and Marvell Technology each trade at less than half their June record closes. Motley Fool contributor Daniel Sparks argues that only Marvell, whose forecast calls for faster sales growth, looks worth buying.
Intel, Arm Holdings and Marvell Technology all set record closes in June, and each stock is now worth less than half as much, according to Motley Fool contributor Daniel Sparks. Intel closed at $58.27 on Nov. 4, off around 59% from $140.94, its record close on June 22.
Arm ended that day at $191.80, around 56% under its June 18 record close. Marvell, meanwhile, finished at $159.80, about 50% below where it closed on June 4.
All three fell between around 4% and 7% on Nov. 4 alone, then slid further on Nov. 5. Investors were weighing whether Democrats' midterm wins might slow the build-out of artificial intelligence data centers.
Intel's profit outlook falls below half its third-quarter level
Intel's third-quarter revenue rose 21% year over year. The problem is the outlook it gave on Oct. 29, which sees adjusted earnings per share of $0.25 for the fourth quarter, under half the $0.52 it earned in the third.
Sparks names PCs as the biggest reason. Higher memory prices have pushed up what new PCs cost, and Intel expects revenue in its PC chip segment to drop over 20% from the third quarter. Chief financial officer David Zinsner sees the weakness lasting until at least mid-2027.
Arm's royalty growth slows to 8%
Arm's fiscal second-quarter revenue climbed 27% year over year to $1.44 billion. Royalties, however, grew just 8% to $670 million, down from 22% growth in fiscal Q1. Arm said memory prices hit the smartphone market and offset some of its gains elsewhere.
Licensing revenue jumped 50% to $773 million. Even so, at around $170, Arm stock trades at around 56 times its expected earnings for next fiscal year.
Marvell's revenue growth climbs each quarter
Marvell's revenue growth rose from 28% year over year in the first quarter to 37% in the second. On Nov. 2, the company said fiscal third-quarter revenue is tracking with its $3.15 billion forecast, now within 2% either way, or around 52% above the year-ago quarter.
The same day, Marvell agreed to buy Lumentum Holdings in an all-stock deal that values the optical parts maker at around $115 billion, including its debt. At around $141, Marvell stock trades at around 19 times the earnings expected for fiscal 2028, based on its business alone.
Sparks thinks both Intel and Arm still cost too much given their problems, and that Marvell is the only one of the three whose latest forecast calls for sales growth to speed up again.
Source: The Motley Fool
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