Marvell Sees Strong AI Chip Demand, Forecasts Higher Revenue
Hey everyone, big news from Marvell Technology, you know, MRVL.O. They just dropped their second-quarter forecast, and guess what? It looks like they're expecting more money coming in than what Wall Street thought. This is all thanks to their custom chips, which are apparently a huge deal for all that artificial intelligence stuff happening in data centers.
So yeah, the demand for these special AI chips is still really strong. And it's not just those; their networking chips and some other cool tech are also seeing a lot of orders. This is helping out those massive companies that run huge data centers they call hyperscalers. They need to build up their systems to handle all the AI going on. Marvell even said on their earnings call that they think this AI trend is going to keep going strong. They mentioned big companies are spending a lot, plus there are these new government data projects and even new players popping up in the market, which means more chances for them to grow.
Get this, the data center part of Marvell's business, which is actually most of their money like 76%, brought in a whopping $1.44 billion just in the first quarter. Their other areas, like the ones that deal with phone carriers and businesses, are also slowly getting better after things were a bit slow for a while with too much stuff sitting around.
Someone named Angelo Zino, who's an analyst at CFRA Research, said he thinks the custom chip business will be the main thing driving Marvell's growth over the next few years, like three to five years. He even said it will help their profits, even if the profit margin on those might be a little lower. He also mentioned that Marvell is having a webinar about custom chips pretty soon, on June 17, and maybe they'll show off some new opportunities or even some new customers they've won for 2026. That could be pretty exciting, right?
But, you know, it's not all sunshine and rainbows. The business with regular folks, like for gaming stuff, was still kinda weak for Marvell. Their money from that went down by 29% from the previous quarter, probably 'cause gaming is seasonal. The industrial part of their business also had a tough time, with money dropping by 12% compared to before.
After all this news came out, the company's shares actually went down a little bit, about 2%, in late trading. Marvell is predicting around $2 billion in revenue for the second quarter, give or take 5%. Analysts were expecting about $1.98 billion, so that's pretty close.
Oh, and remember back in May, Marvell actually pushed back a planned event for investors? They said it was because the economy was a bit up and down right now. For the quarter that ended on May 3, they reported $1.9 billion in revenue, which was just a smidge higher than what analysts thought, which was $1.88 billion. So, what do you think about all this?
