Marvell Tech Sees Strong AI Chip Demand
Okay, so Marvell Technology, you know, the chip guys, they're feeling pretty good about things. Like, they just dropped their forecast for the next few months, and it looks like they expect to make more money than folks on Wall Street thought. Why? Well, it all comes down to these special chips they make for all that AI stuff that needs tons of power in data centers. Demand for those custom AI chips is seriously driving things.
And get this, it's not just the AI chips. Their networking chips and those fancy electro-optics things are seeing strong orders too. This is helping out the big tech companies, the ones running those massive data centers, who are trying to keep up with all the AI happening. Marvell basically said after their earnings call that they think this AI boost is gonna stick around. They see big spending from the huge data center companies, plus new projects from governments and folks in new markets getting into the game. Lots of chances for growth, you know?
Their data center business, which is the biggest part of what they do (like, 76% of their total sales!), raked in a cool $1.44 billion last quarter. Also, their businesses that deal with phone companies and other companies seem to be doing better after things were a bit slow for a while. One analyst, Angelo Zino, thinks these custom chips are gonna be the main thing driving Marvell's growth over the next few years, like maybe 3 to 5 years. Even if the profit margin on them isn't super high, they'll still help the bottom line, he said. He also mentioned that a web thing they're doing about these custom chips on June 17th could be a big deal, maybe showing they can get even more customers or sell to a bigger market in a year or two.
Now, not everything is sunshine and rainbows, tbh. Their consumer business was pretty weak, with sales dropping 29% from the quarter before. That's cause of the usual ups and downs in gaming demand, I guess. And their industrial business wasn't great either, with sales falling 12%. Because of all this, the stock dipped a little bit after hours, like 2%.
Overall, they expect to make around $2 billion next quarter, give or take 5%. Analysts were kinda guessing around $1.98 billion, so Marvell's looking a bit more optimistic. You might remember they actually put off their investor day back in May, saying things were a bit uncertain economically. But for the quarter that just ended, they brought in $1.9 billion, which was also a little bit more than what analysts expected. So, mixed bag, but the AI stuff is definitely looking good for them. What do you think about the future of AI chips?
