Marvell Technology is an American company, a manufacturer of processors, microcontrollers and telecommunications equipment. A peculiarity of the business is the lack of its own assembly facilities. Marvell only develops and sells products. The trend for the development and widespread distribution of artificial intelligence (AI) favors the company’s business. The fair value of Marvell Technology shares is $90.1, growth potential is 35.5%. Dividend yield – 0.36%.
Investment theses
🔼 Growth in AI-related areas. At the end of fiscal 1Q2025 (1Q2024), Marvell delivered disappointing results overall. Revenue fell 12% YoY to $1.161 billion, and adjusted earnings per share fell 22.6% YoY to $0.24. However, both indicators came out better than market expectations and the company’s own forecasts. It is worth paying attention to the outstanding growth in the data center segment (+87% y/y). This area reflects revenues associated with the production of chips used for AI. The rapid growth of this market allows us to expect that this trend will continue in the coming quarters.
🔼Positive forecasts from management. Marvell management is optimistic about the company's prospects. Revenue is expected to be $1.25 billion +/- 5%, and earnings per share are expected to be $0.29 +/- $0.05. The forecasts turned out to be higher than analysts' expectations.
🔽Risks. A recession in the U.S. economy could result in weak results from Marvell's non-AI businesses, which would negatively impact overall revenue.
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Disclaimer
The information provided above is not an investment recommendation and does not guarantee or promise profitability. Before investing, you should assess the potential risks and rewards and determine your willingness and ability to accept such risks.
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