Marvell Tech Expects Strong Quarter Driven by AI Chips
Hey everyone! So, Marvell Technology kinda dropped some news yesterday, and it looks like they're feeling pretty good about the next few months.
They're basically saying they expect to make more money in the next quarter than Wall Street thought. Why? Well, it all comes down to those fancy custom chips they make. You know, the ones that help power all that artificial intelligence stuff in big data centers. Demand for these things is still through the roof, and even their networking chips and other bits and pieces are seeing a lot of orders coming in.
These chips are a big deal for those huge tech companies that need to beef up their infrastructure to handle all the AI work. Marvell mentioned that they think the AI boom is still gonna be strong, with these big companies spending a lot, new data center projects popping up, and even some newer players getting into the game. It sounds like there are still tons of opportunities out there.
Their data center business is a massive chunk of their total sales, like 76% of it. And in the last quarter, that part brought in a cool $1.44 billion. Also, their business with phone companies and other businesses is slowly getting back on track after things were a bit slow for a while.
One analyst, Angelo Zino, is saying that those custom chips will be the main driver for them over the next few years, maybe 3 to 5. He thinks they'll help boost profits even though the profit margins on those might not be as high. He also pointed out that a webinar they have coming up in June could be interesting because they might show off how much bigger the market could get and maybe even announce some new customers.
Now, it's not all sunshine and rainbows. Their consumer business, like stuff for gaming, wasn't doing so hot last quarter. Sales there dropped quite a bit, around 29%, which they said was just due to the time of year for gaming demand. The industrial part of their business also saw a dip, down about 12%.
After the news came out, their stock went down a little, like 2%, which is kinda weird, tbh, but hey, that's how the market goes sometimes I guess.
For the next quarter, they're expecting sales to be around $2 billion, give or take 5%. Analysts were expecting closer to $1.98 billion, so it's a bit higher than that. Back in May, they actually pushed back their investor day meeting cause they said things were a bit uncertain in the economy, so that was a little odd too. But their sales for the last quarter, ending in early May, were about $1.9 billion, which was also a bit more than what analysts thought.
So, what do you think about Marvell's outlook? Is the AI wave really going to carry them that far?
