Because that is how stocks often rise in these heady days when they almost never fall: on casual remarks, vague hopes and, occasionally, lulz.
Sure enough, that is exactly what happened to Marvell on Tuesday. At a trade show in Taipei, Taiwan, Huang declared the chipmaker, worth about US$192 billion on Monday, was destined to be a US$1 trillion company. Marvell’s stock skyrocketed more than 25%, its biggest single-day gain in three years, pushing the Santa Clara, California, company’s market cap to more than US$245 billion.
What’s possibly even more remarkable is that this 25% of froth was added to a 158% gain in the months preceding it.
It also made for a lot of grumbling on the Reddit forum r/wallstreetbets about the ease with which Huang created US$50 billion in wealth by merely speaking a sentence. Standard responses included “This market has become a joke,” “This market is crazy” and “Everyone is getting rich except me and u brah.”
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Of course, this is also the forum that includes traders who’ve enjoyed Virgin Galactic Holdings Inc. recently achieving its own ludicrous stock chart thanks partly to making bets that uninformed people would buy its shares (ticker symbol SPCE) thinking it was actually SpaceX (future ticker symbol SPCX). It’s jokes all the way down.
Still, such price-pumping shenanigans risk breeding a mistrust in the market among retail investors who already read at least one headline a day about an AI bubble ready to pop. Such lack of confidence gets a bit more serious when said shenanigans are committed by the US president, who also happens to benefit from them as part of his many thousands of trades.
Late last month, President Donald Trump praised chipmaker Micron Technology Inc, shares of which he owned, contributing to a 37% gain in a little more than one week. The stock had already doubled in the two months before he spoke (and after he purchased bucketloads of them in the first quarter), but any nonpresidential investor looking for a better entry point now faces a long wait.
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Before that, Trump touted Dell Technologies Inc a couple of times after buying millions of dollars’ worth of its shares. His first admonition to “go out and buy a Dell computer,” in February, had little market effect. His second, on May 8, made the stock jump 13% to an all-time high. Since then, the stock is up an additional 72%, thanks partly to a US$9.7 billion Pentagon contract the company landed a couple of weeks after Trump pumped it.
Wall Street has obviously learned to pay close attention to stock-related plaudits from high places. Is it fair to the average investor? Sustainable? Those are loser questions. Until they aren’t. - Bloomberg Opinion
