Marvell Technology Bets Big on AI Chips, Sees Strong Future
Hey everyone, let’s chat about Marvell Technology, you know, MRVL.O. So, get this, they're thinking their sales for the next few months are gonna be even better than what the smart folks on Wall Street thought.
Why? Well, big part of it is these special chips they make for all that AI stuff happening in data centers. Makes sense, right? Everyone is trying to make their AI systems bigger and better, and Marvell's chips are a big help with that. They're also seeing good orders for their networking chips and electro-optics, which is cool.
Marvell said on their call after the earnings report that they think the AI boom will keep going strong. That's because the huge cloud companies are still spending a bunch of money, and there are new projects popping up for data centers, plus more players in other markets are getting in on the action. So yeah, lots of chances for growth.
Their data center part of the business is huge, like, 76% of all their money comes from there. And just in the last few months, they made $1.44 billion from it. Also, their other parts, like the ones for phone companies and businesses, are slowly getting better after things were a bit slow.
One analyst, Angelo Zino, thinks these special custom chips are gonna be the main thing that makes Marvell grow a lot over the next 3 to 5 years. Even though they might not make as much profit on each chip, he says it will still help their overall profit. He also mentioned this online event they have coming up on June 17th about custom chips. He thinks that could be a big deal cause they might show off some new ideas or maybe even announce they've landed some new customers next year.
But, you know, not everything is sunshine and rainbows. The part of their business that sells to regular people is still kinda weak. Revenue there went down a lot, like 29%, probably cause of how gaming demand changes throughout the year. The industrial part was also struggling a bit, down 12%.
After all this news came out, the company's stock went down a little bit, about 2%. Marvell figures their sales for this current quarter will be around $2 billion, maybe a little more or less, which is pretty close to what the analysts were guessing.
Remember back in May, Marvell actually put off their big investor meeting? They said it was because the economy was kinda uncertain. But for the quarter that just ended in May, they actually made $1.9 billion in revenue, which was slightly higher than what everyone expected. So, it's a bit of a mixed bag, ya know?
