Semiconductor company Marvell Technology MRVL reported third quarter financial results after market close Thursday. Here's a look at what analysts are saying about the report and what's next for the company.
The Marvell Analysts: Oppenheimer analyst Rick Schafer has an Outperform rating and a price target of $70.
Benchmark analyst Cody Acree has a Buy rating and a price target of $75.
Piper Sandler analyst Harsh Kumar has an Overweight rating and lowers the price target from $75 to $70.
KeyBanc analyst John Vinh has an Overweight rating and lowers the price target from $80 to $70.
Needham analyst Quinn Bolton has a Buy rating and a price target of $65.
Goldman Sachs analyst Toshiya Hari has a Buy rating and a price target of $60.
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Oppenheimer on Marvell: Marvell is seeing increased orders for artificial intelligence related products, which could be a boost, Schafer said.
"Cloud AI order velocity continues to increase as CSPs scale out AI server deployments," Schafer said.
For the company's data centers segments, the analyst sees traditional server rebounding and new products powering "significant growth" in calendar year 2024.
Artificial intelligence revenue for the data center segment could be greater than $800 million in calendar year 2024, the analyst said.
"MRVL uniquely positioned in DC AI with electro-optics, switching, storage and custom ASIC. We see sales accelerating into '24 led by multiple new product cycles and share/content gains."
Schafer said Marvell's growth story is still in the early innings.
Benchmark on Marvell: The company's data center artificial intelligence and cloud demand were the highlights in the third quarter for Acree.
The analyst said the company's third quarter results and fourth quarter outlook point to some of the macroeconomic challenges named by semiconductor peers, but Marvell could be positioned well.
"We believe the company is in an enviable position to benefit from the tech sector's rapid adoption of artificial intelligence," Acree said.
The analyst noted that the increased adoption of AI and spending from companies should drive upside for Marvell.
"We would use any share price weakness as an opportunity to build positions."
Piper Sandler on Marvell: The semiconductor company's data center segment showed strength, but other segments are suffering, Kumar noted.
"Overall, roughly half of the business in the January quarter will be underwater from a growth perspective, including a significant downtick in the carrier space," Kumar said.
The analyst added that the data center segment is seeing strong trends.
KeyBanc on Marvell: The strength of the artificial intelligence segment in the third quarter was offset by other segments being weaker, Vinh said.
"AI is expected to exit this year well above its prior outlook of $200M and tracking above its LT revenue target of $800M in FY25/FY26," Vinh said.
The analyst said Marvell is on track to start volume production next year for several AI items.
Needham on Marvell: The hype around artificial intelligence for Marvell isn't misplaced, Bolton said after the third quarter results.
"Cloud and AI revenue is growing significantly faster than expected," Bolton noted.
The analyst said the strength of artificial intelligence and data center did not offset the other reporting segments.
"The Data Center business was largely responsible for the F3Q24 revenue beat, and will be the sole growth segment in F4Q24."
Goldman Sachs on Marvell: The third quarter was a mixed print and fourth quarter guidance underwhelmed for Hari.
"We maintain our Buy rating on Marvell as we continue to perceive the company as one of the key enablers of high-speed Data Center connectivity and beneficiaries of the ongoing built-out of AI infrastructure," Hari said.
The analyst sees improving fundamentals for Marvell coming for its high-margin merchant businesses.
"While the majority of Marvell's AI business resides in optics today, we believe the medium-to long-term outlook for its custom computer business remains promising."
MRVL Price Action: Marvell shares are down 5% to $53.20 at the time of publication Friday, versus a 52-week trading range of $33.75 to $67.99. Shares of Marvell are up 55% year-to-date in 2023.
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