Marvell Technology Inc. is set to announce its earnings on Thursday afternoon, following Nvidia Corp.’s impressive performance. However, Marvell’s artificial intelligence sales may face challenges due to weaknesses in more traditional computing sectors.
Promising Prospects for Marvell’s AI Products
Analyst Christopher Rolland from Susquehanna Financial mentioned that Marvell’s MRVL, -5.19% PAM4 digital signal processors, which are utilized in cloud data centers, and its application-specific integrated circuits (ASICs), both benefit from the high demand for AI products. These assets were acquired through Marvell’s recent purchase of Inphi in 2020.
Despite the positive prospects, Rolland expects the upcoming results to be “generally in-line,” emphasizing the uncertain nature of the guidance provided.
Balancing the Focus on Nvidia
While Nvidia grabs all the attention and dominates headlines, Mizuho desk analyst Jordan Klein suggests investors monitor companies like Marvell closely. Following Nvidia’s overachieving earnings and promising outlook released on Wednesday, Marvell presents itself as another valuable candidate to watch.
Rolland shares Klein’s sentiment, maintaining a positive rating on Marvell’s stock and raising the price target from $60 to $70.
It remains to be seen whether Marvell’s growing opportunities in AI will be sufficient to offset the continued challenges faced by traditional networking, storage, communications infrastructure, and consumer sectors.
Analyst Predictions for Marvell Technology Group’s Earnings
As Marvell Technology Group (NASDAQ: MRVL) prepares to announce its quarterly earnings, analysts are not expecting a significant beat and raise. Despite this, the stock has already seen substantial growth priced in. Analysts anticipate an improvement in sentiment as the second half of 2024 approaches, particularly with the rise in ASIC ramps for cloud customers.
It is also worth keeping an eye on the reports of Advanced Micro Devices Inc. (NASDAQ: AMD), which recently released its earnings, and Broadcom Inc. (NASDAQ: AVGO), scheduled to report next Thursday.
Below are the numbers that analysts have identified as significant for Marvell’s upcoming report:
- Adjusted earnings: 32 cents per share
- Total revenue: $1.33 billion, a 12% decline from the previous year
- Data-center sales: Expected to decline by 32% to $439.9 million
- Carrier infrastructure sales: Expected to remain fairly flat at $286.2 million
- Enterprise networking sales: $329.8 million, a 3% decline from the previous year
- Auto/industrial chip sales: Anticipated to rise by 18% to $98.3 million
- Consumer sales: Expected to increase by 9% to $179 million
Analysts’ forecasts for the current quarter are as follows:
- Adjusted earnings: 40 cents per share
- Total revenue: $1.39 billion, with $503.9 million attributed to data-center sales.
Marvell shares have experienced a significant year-to-date increase of 57%, outperforming the PHLX Semiconductor Index (SOX), the S&P 500 index (SPX), and the tech-dominated Nasdaq Composite (COMP), which have seen gains of 39%, 15%, and 30% respectively.