FormFactor, Entegris, Penguin Solutions, Teradyne, and Marvell Technology Stocks Trade Up, What You Need To Know

A number of stocks jumped in the afternoon session after investors shrugged off interest rate hike expectations following the August jobs report and unwound defensive positioning in beaten-down chip designers, according to Bloomberg. The U.S. Bureau of Labor Statistics reported that employers added 162,000 nonfarm payroll jobs in August, easily beating estimates of a 56,000 increase from economists polled by FactSet.

The agency also reported that the national unemployment rate held steady at 4.1%.The strong labor data initially raised expectations for further monetary tightening, but odds of a September quarter-point interest rate hike settled at a coin-toss 50%, according to federal funds futures data reported by Bloomberg. Typically, higher interest rates place downward pressure on high-growth technology equities by discounting future projected cash flows.Despite these macroeconomic concerns, traders rotated back into the chip sector. During the regular session, KLA Corporation rose 7.98% and Semtech climbed 7.96%, while Marvell Technology advanced 5.92% and Advanced Micro Devices gained 4.18%, according to stock market quote data.

The previous big move we wrote about was 7 days ago when the stock dropped 9.7% on the news that investor concerns over the timing of revenue contributions from its Google custom AI chip agreement overshadowed second-quarter results and raised revenue outlooks. According to a company press release and earnings commentary, Marvell Technology reported second-quarter revenue of $2.74 billion, up 36.5% year-over-year, alongside in-line adjusted earnings of $0.94 per share. Top-line performance was heavily driven by the company’s Data Center end market, which surged 46% year-over-year to $2.17 billion on rampant hyperscaler demand for its optical DSPs and scale-out networking products. The semiconductor manufacturer also demonstrated solid operational execution, expanding operating margins to 16.8% from 14.5% a year ago and lowering inventory days outstanding from 110 to 96, though free cash flow margins dipped slightly to 17.5%.

Looking ahead, management issued a robust third-quarter outlook, guiding for revenue of $3.15 billion and adjusted EPS of $1.10 at the midpoint—both comfortably ahead of Wall Street consensus estimates.However, investor optimism was dampened by management’s commentary regarding the trajectory of its highly anticipated custom silicon business. Despite recently signing a massive commercial warrant agreement with Google to provide custom chips for its TPU ecosystem—including AI inference accelerators and memory interface controllers—management clarified that the most substantial revenue contributions from this expanded partnership will not fully materialize until fiscal 2029 (calendar year 2028). While Marvell is successfully positioning itself as a critical enabler of next-generation AI data centers, the extended timeline for these hyperscaler deployments weighed on sentiment, ultimately overshadowing the otherwise stellar quarterly performance.