Analysts are optimistic about Marvell Technology due to fast data center revenue growth.

From Nasdaq: 2024-08-30 12:00:00

Marvell Technology (NASDAQ: MRVL) is a semiconductor stock with fast data center revenue growth. The stock is up 36% while the Invesco PHLX Semiconductor ETF (NASDAQ: SOXQ) is up 44%. Three Wall Street analysts see an upside of 27% in the stock.

Marvell serves five large end markets, with the data center market making up 70% of revenues in Q1 of 2024. Data center revenue increased 87% from Q4 of 2023. Other segments saw declines, leading to an overall 19% revenue decrease.

Marvell beat earnings expectations in its Q2 financial results, with data center revenue increasing 92% year over year and 8% from the previous quarter. All other segments fell quarterly, but the firm expects growth across the board next quarter.

Marvell’s expertise in custom computing with ASICs presents a significant opportunity. ASICs are energy-efficient and cater to specific tasks, making them ideal for hyperscaler companies. As AI demand grows, the efficiency of ASICs becomes crucial.

Marvell faces competition in the ASIC space from Broadcom (NASDAQ: AVGO). While Marvell saw faster data center growth, Broadcom has overall revenue growth of 43% in Q2 compared to Marvell’s 5% decline. Broadcom also has lower forward price-to-earnings ratio and is profitable.



Read more at Nasdaq: Why Analysts Are Bullish on Marvell Despite Sector Weakness