Marvell Tech Sees Strong AI Chip Demand, Forecasts Higher Revenue
Hey, so Marvell Technology (that's MRVL.O, by the way) recently shared their thoughts on the next few months, and they're feeling pretty good! They're predicting their sales for the second quarter will actually be better than what the folks on Wall Street were expecting. Why, you ask? It's all about those custom chips used for artificial intelligence stuff in big data centers. People are seriously wanting these things, and that's driving a lot of their business.
Demand for these custom AI chips is still really strong, which is awesome. But it's not just AI chips, their networking chips and these cool electro-optics things are getting lots of orders too. This helps those super big companies that need to beef up their systems to handle all the AI work. Marvell even said after their earnings call that they think this AI momentum will keep going. They mentioned big companies spending a lot, new government data center projects, and even new players popping up in emerging markets, which is opening up even more chances for them to grow. Speaking of data centers, that part of Marvell's business is huge, like 76% of all their sales! In the first quarter, they made a whopping $1.44 billion just from that.
It's not all just about data centers though. Marvell's also seeing their business with phone companies and other businesses slowly bouncing back after things were a little slow for a bit. One analyst, Angelo Zino from CFRA Research, thinks that making custom chips will be the main thing driving Marvell's growth over the next three to five years. He said it will help their profits, even if those chips have slightly lower profit margins. He also pointed out that Marvell is having a webinar soon about custom silicon, and that could be a big deal. Maybe they'll show off more opportunities or even announce some new customers for 2026?
Now, it wasn't all perfect news. The regular consumer market wasn't so hot for Marvell. Sales there actually dropped by 29% compared to the previous quarter. That's probably because of the usual ups and downs with people buying gaming stuff. The industrial side of things also had a tough time, with sales going down 12% quarter-over-quarter. Because of all this, Marvell's stock went down a little, about 2%, after the market closed.
For the next quarter, Marvell is guessing their sales will be around $2 billion, give or take 5%. The analysts were expecting a little less, around $1.98 billion. Remember back in May, Marvell actually put off a planned investor day because they said things were a bit uncertain with the economy? Despite that, they still reported $1.9 billion in sales for the quarter ending May 3rd, which was actually a bit higher than the analysts thought. So, idk, maybe things are looking up despite some bumps?
