A well-known software executive is entering the chip industry, which may encourage investors to follow suit.
Dan Durn, the chief financial officer of Adobe (ADBE), announced his resignation on Thursday. Marvell Technology (MRVL) announced on the same day that Durn will become its CFO on Monday.
The statement was made several months after Shantanu Narayen, the CEO of Adobe, announced his intention to step down. Investor concerns that Adobe isn’t ready to compete or even survive in the AI era are the reason behind the turmoil in the company’s upper echelons. Adobe’s stock fell 8% on Friday after the company released its earnings on Thursday.
Given its critical role in driving the AI revolution, investors have been optimistic about the chip industry over the past few months.
According to Dow Jones Market Data as of Friday, the iShares Expanded Tech-Software Sector ETF (IGV), a proxy for software equities, is down 14.3%, while the iShares Semiconductor ETF (SOXX), a proxy for chip stocks, is up 99.7% so far this year.According to Gil Luria, a D.A. Davidson analyst who spoke to MarketWatch, “some investors may be concluding that Mr. Durn’s departure for a semi company is an indication of that sector having greater opportunity.”Luria continued, “There is a feeling that many software companies will find it difficult to demonstrate accelerating growth in this environment, much like Adobe is currently struggling with.”
Read more: Investors are upset that Adobe is losing another senior leader
In contrast, Marvell has increased by 312% over the last year, and Durn’s choice to join the business raises the possibility that “problems may be deeper at Adobe,” according to a report written on Thursday by Jefferies analyst Brent Thill. Over the last year, Adobe’s stock has dropped by 51%.
According to Thill, the move raises concerns about the company’s capacity to draw in and keep senior executives, and the timing for Adobe’s search for a CEO to succeed Narayen “does not appear immediate.” According to the company, Narayen will hold the position until Adobe finds a replacement.
Amidst a broad market increase on the SPX on Friday, a number of software stocks slightly declined, indicating wider difficulties for the industry. The stocks of NextNav (NN), Rubrik (RBRK), and Circle Internet Group (CRCL) were all down 3% to 4%. Oracle’s (ORCL) stock was down 2%, Salesforce’s (CRM) stock was down 1%, and the iShares Expanded Tech-Software Sector ETF (IGV) was down 1%. Near the end of the Friday session, Marvell (MRVL) shares were up 2%.
