Marvell Technology rides AI wave, forecasts strong Q2
Hey, so guess what? Marvell Technology, that's MRVL.O if you're checking stocks, is feeling pretty good about the next few months. They're thinking they'll make more money than Wall Street thought they would in the second quarter. Why? Because everyone wants their custom chips to power all that artificial intelligence stuff happening in data centers.
Seriously, those AI chips are just flying off the shelves! And it's not just AI; their networking chips and the fancy electro-optics things are also getting tons of orders. This is helping those big tech companies, you know, the 'hyperscalers,' build up their infrastructure to handle all the AI work.
Marvell even said after they shared their earnings that they think the good times for AI will keep rolling. They see big companies spending a lot, plus new projects for government data centers and even smaller companies getting into the game. It's opening up lots of chances for them to grow.
Speaking of money, their data center business made a cool $1.44 billion last quarter. That's a huge chunk of their total money made, like 76%! And it seems their other areas, like carrier and enterprise networking, are bouncing back after things were a bit slow with too much inventory.
Someone named Angelo Zino, an analyst at CFRA Research, thinks these custom chips are going to be the main thing helping Marvell grow over the next few years, maybe even for three to five years. He said they'll help with profits even if they don't make as much gross profit margin. Angelo also mentioned a webinar about custom silicon coming up on June 17. He thinks it could be a big deal, maybe showing that the market is getting bigger or that they've landed some new customers for 2026.
But, yeah, not everything is sunshine and rainbows. Their general consumer business wasn't so hot, down about 29% from the previous quarter. Apparently, it's because people aren't buying as many gaming products during this time of year. And their industrial business also had a tough time, with revenue falling 12% from the quarter before.
After all this news came out, their stock actually dipped a little, about 2%, after the market closed. For the next quarter, they're expecting revenue to be around $2 billion, give or take 5%. Analysts were guessing about $1.98 billion, according to this LSEG data.
Oh, and remember back in May? Marvell actually pushed back their investor day meeting. They said it was because things were a bit uncertain with the economy. But hey, they still reported revenue of $1.9 billion for the quarter that ended May 3, which was just a bit higher than the $1.88 billion analysts expected. So, what do you think about all this? Are those AI tailwinds really going to keep pushing Marvell up?
