Marvell Tech Rides AI Chip Wave, Forecasts Strong Quarter

So, check this out! Marvell Technology, you know, MRVL.O, just dropped their forecast for the next quarter, and they're thinking it's gonna be pretty good. Like, better than what Wall Street expected. Why? Looks like it's all about those custom chips they make for AI stuff in data centers. People really want that for their AI projects, you know?

Demand for these special AI chips is still pushing things forward. Also, their networking chips and the ones for light-based communication are doing well too. This helps those big online companies who are trying to build up their systems to handle all the AI work.

Marvell even said on their call after the earnings report that they think the AI trend will keep being strong. They say it's because big companies are spending a lot, there are new government data center projects popping up, and smaller players are getting into the game. This opens up more chances for them to grow, which is cool.

Their data center part of the business, which is actually 76% of everything they do, brought in a whopping $1.44 billion in the first quarter. Their other areas, like the ones for carriers and businesses, are also starting to bounce back after things were a bit slow for a while. You know how sometimes companies have too much stuff in stock? That was happening, but it's getting better now.

Someone named Angelo Zino, who's an analyst at CFRA Research, mentioned that he thinks the custom silicon part is gonna be the main way they grow over the next few years, maybe 3 to 5 years. He said it'll help their profits even though the profit margin on those might be a bit lower. He also thinks that a webinar Marvell is doing on June 17 about custom silicon could be interesting. Maybe they'll show off more opportunities or talk about getting new customers in 2026. Idk, we'll have to see!

But, not everything is sunshine and rainbows. The part of their business that sells to regular people hasn't been great. Revenue there went down by 29% from the previous quarter, mainly because of how gaming demand changes with the seasons. The industrial side is also having a tough time, with revenue dropping 12% from the last quarter. Because of all this, Marvell's stock price went down about 2% after hours.

For the next quarter, they're guessing revenue will be around $2 billion, give or take 5%. Analysts were generally expecting around $1.98 billion, so it's pretty close to what they were thinking. Remember back in May, Marvell actually postponed their investor day meeting? They said it was because the economy was a bit uncertain, which makes sense. For the quarter that ended May 3rd, they reported revenue of $1.9 billion, and analysts were expecting about $1.88 billion.