Marvell Rides AI Chip Wave, Sees Strong Future
Hey, so Marvell Technology, you know, ticker symbol MRVL.O, dropped some news recently.
They're thinking they'll make more money than Wall Street folks expected in the next few months. Why? 'Cause everyone's still really into getting those special chips that help power all the AI stuff in big data centers. It's like this huge wave of artificial intelligence is still driving everything, and the chips that help connect things and send light signals are also seeing lots of orders rolling in.
Marvell totally gets that. They mentioned after their earnings call that they think this AI trend is gonna keep going strong. Big companies who need to scale up their tech are spending big time, there are new government data projects popping up, and even newer players in the market are expanding too. This is opening up some serious chances for them to grow.
Just to show you how big this is for them, a huge chunk of their money, like 76% of it, came from their data center business in the last few months. That was about $1.44 billion! Also, it sounds like their business with phone carriers and other companies is starting to bounce back a bit after things were a little slow.
An analyst named Angelo Zino from CFRA Research figures that making these custom chips is gonna be a big deal for Marvell over the next 3 to 5 years. He thinks it'll help their profits even if the profit margin on those particular chips is a little lower. He also said that a webinar they have coming up on June 17th about custom chips could be interesting. Maybe they'll show off how much the market for these chips is growing or talk about some new customers they've landed for next year.
But, it wasn't all sunshine and rainbows. The part of their business that deals with regular customers, like for gaming stuff, wasn't doing so hot. Revenue there dropped about 29% from the previous quarter cause, you know, gaming demand changes with the seasons. Their part that deals with manufacturing stuff also had a bit of a tough time, with revenue down about 12% from before.
After all this news came out, their stock price dipped a little, about 2% in after-hours trading.
For the next few months, Marvell is expecting to make around $2 billion in revenue, give or take 5%. Analysts were expecting something similar, around $1.98 billion.
Oh, and remember back in May, Marvell said they were putting off their big investor meeting? They said it was because things were a bit up in the air with the economy. Last quarter, they brought in $1.9 billion, which was a little more than what analysts thought they would get, which was around $1.88 billion.
So, what do you think about all this AI chip stuff? Is this trend here to stay, or could things change?
