Marvell Technology Sees Strong AI Chip Demand
Okay, so get this: Marvell Technology, you know, MRVL.O, is feeling pretty good about their next few months. They reckon they're gonna make more money than folks thought in the second quarter. And why? Big thanks to their special chips that help power all that fancy artificial intelligence stuff happening in huge data centers.
Demand for these custom AI chips is still going strong. Also, chips for connecting networks and those cool electro-optics are seeing a lot of orders too. This all helps those massive tech companies who need to build up their infrastructure to handle AI workloads. Marvell even said after their earnings call that they expect the AI buzz to keep boosting things. They're seeing strong spending from those huge companies, new government data center projects popping up, and even new players in emerging markets expanding the potential market. That's pretty cool and opens up more chances for growth.
Their data center business is a huge deal for them, making up like 76% of all their money. In the first quarter, that part brought in $1.44 billion. Their other businesses, like carrier and enterprise networking, are also starting to bounce back after things were a bit slow with too much stuff sitting around.
One expert, Angelo Zino from CFRA Research, thinks these custom chips will be the main way Marvell grows over the next 3 to 5 years. He even said theyâll help with how much profit they make, even if the profit margin itself is a bit lower. He also mentioned a webinar they're having on June 17 about custom silicon. He thinks maybe that could show off more opportunities and some new customers they might get in 2026. That's something to watch out for, right?
Now, on the flip side, the regular consumer market isn't doing so hot for them. Money from that part dropped by almost 30% compared to the last few months, mostly cause gaming demand changes with the seasons. The industrial side also had a tough time, with revenue going down by 12% in just a few months. So, not everything's sunshine and rainbows.
After all this news came out, the company's shares went down a little bit, about 2%, in trading after the market closed. Still, they're expecting second-quarter revenue of around $2 billion, give or take 5%. That's a little more than the $1.98 billion that analysts were guessing, based on what LSEG has tracked. Remember back in May, Marvell actually put off their investor day because things were kinda uncertain out there in the economy. For the quarter that ended May 3, they reported $1.9 billion in revenue, which was a bit better than the $1.88 billion analysts were expecting.
