NEW YORK, Oct. 14, 2024 Semiconductor giant Marvell Technology (MRVL, Financial) is forecasted to outperform analyst estimates in the second half of the year, driven by robust growth in custom application-specific integrated circuit (ASIC) sales and sustained demand for 800G optical products, according to Citi analysts. Moreover, the firm maintained its Buy rating on Marvell with a hefty target price of $91, 18.50% higher than its current price.
Citi’s analysts, led by Atif Malik, underscored Marvell’s positioning as one of the two companies that can effectively deliver the expertise required in developing cutting-edge custom ASIC chips. Additionally, Marvell’s AI-related sales are forecasted to reach $1.5 billion in FY2025 and $2.5 billion in FY2026, backed by major hyper-scalers, including Amazon (AMZN, Financial), Alphabet (GOOG, Financial), and others.
The report also discussed how Marvell’s Trainium2 chip, used by Amazon Web Services (AWS), continues ramping up impressively. Also, AWS CEO Matt Garman expressed enthusiasm for expanding AI/ML workloads at recent conferences. As we look ahead, Citi expects Marvell to post stronger sequential revenue growth in Q4 while remaining optimistic over Marvell’s long-term prospects, citing sustained AI growth and recovery in non-cloud markets.
This article first appeared on GuruFocus.
