Marvell Technology's Revenues To Recover On AI Demand; These 9 Analysts Dive Into Q1 Results

Zinger Key Points
  • Marvell Technology’s Data Center segment continues to outperform, while Custom Compute exerts pressure, one analyst said.
  • Management expects revenue growth to accelerated in 2H on continued ramp of AI ASIC programs, another analyst added.

Shares of Marvell Technology Inc MRVL tanked in early trading on Friday, after the company missed earnings for its fiscal first quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

  • Oppenheimer analyst Rick Schafer maintained an Outperform rating, while raising the price target from $80 to $90.
  • Stifel analyst Tore Svanberg reiterated a Buy rating, while lifting the price target from $86 to $90.
  • BofA Securities analyst Vivek Arya reaffirmed a Buy rating and price target of $95.
  • Needham analyst Quinn Bolton maintained a Buy rating and price target of $95.
  • JPMorgan analyst Harlan Sur reiterated an Overweight rating and price target of $90.
  • Rosenblatt Securities analyst Hans Mosesmann reaffirmed a Buy rating and price target of $100.
  • Piper Sandler analyst Harsh Kumar maintained an Overweight rating and price target of $100.
  • Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating and price target of $85.
  • Roth Capital Partners analyst Suji Desilva reaffirmed a Buy rating on the stock.

Check out other analyst stock ratings.

Oppenheimer: Marvell Technology reported quarterly results broadly in-line with expectations. Carrier/enterprise/consumer (~23% sales) were “down ~70% Y/Y combined," Schafer said in a note. The second quarter is likely to be sequentially flat, he added.

The analyst stated that management now expects AI-related revenues to surpass $1.5 billion this year. "We see 2H tailwinds accelerating into CY25 led by multiple new product cycles and share/content gains," he further wrote.

Stifel: The quarterly results were "slightly above midpoint," as the company's data center AI revenues continue to exceed expectations," Svanberg said. All other end markets are likely to trough in the July quarter, he added.

"AI floor continues to be raised, as we now believe that our prior estimates for AI-related revenue to be $1.5bn+ in FY25E could be comfortably surpassed," the analyst further stated.

BofA Securities: Marvell Technology's legacy business continued to be a drag, while AI tailwinds "continue to pick up speed," Arya said.

The company's AI sales are projected to grow by 75% from fiscal 2025 to 2026, "with additional 10% upside potential from electro-optics and custom ASIC," he added.

Needham: Marvell reported a beat and raise quarter, with the Data Center segment continuing to outperform, Bolton said in a note. "GM will be weighed down through FY25 as the custom compute business ramps with margins well below the corporate average," he added.

"We view the F2Q25 Data Center guide of +MSD% as conservative given growth rates seen by other AI players," the analyst wrote. He further stated that the company is unlikely to reach its target of gross margins of 64%+ through fiscal 2027.

JPMorgan: Marvell reported its quarterly revenues slightly higher than consensus on better-than-expected datacenter revenues, driven by both AI and traditional cloud, Sur said. "The cyclical businesses (carrier and enterprise networking) also bottomed in the Apr-Qtr as we had expected," he added.

Management guided to 8% sequential revenue growth, higher than consensus at 6%, "on continued strength in datacenter (driven by continued ramp of its two AI ASIC programs), rebound in consumer, combined with stabilization in its cyclical businesses after a multi-quarter correction," the analyst wrote.

The company expects growth to accelerate in the second half of the year "on continued strong ramp of its AI ASICs, strong AI Optical DSP shipments, and strength in its cloud datacenter business combined with a modest recovery in its cyclical businesses," he added.

Rosenblatt Securities: Marvell Technology reported mixed results, with a beat on sales and a slight miss on earnings, Mosesmann said.

The guidance of 8% sequential sales growth for the fiscal second quarter "marks a bottom for the company's overall business in the April quarter, with sustained momentum in the AI data center that is expected to continue in the back half of the year, including custom ASICs, electro-optics, network switching, etc.," the analyst wrote. He added that the company to gain significant market share in the AI category over the next several years.

Piper Sandler: Both fiscal first-quarter earnings and second-quarter guidance were in-line with expectations, Kumar said. The company seems to be going through a transition phase, "as their custom AI silicon platform continues to ramp and gain traction at existing customers," he added.

Management's second-quarter guidance seems conservative, a recovery from large declines in key segments like networking and carrier "could potentially provide tailwinds in the second half of the year," the analyst further wrote.

Cantor Fitzgerald: Marvell's earnings were driven by strength in the Data Center business, "offset by continued weakness across the company's more cyclical Enterprise Networking and Carrier businesses," Muse said. The guidance came in broadly in-line with expectations.

"As for clear positives, we highlight April Q Data Center revenues showing a strong beat led by Inphi followed by a strong July Q guide beat led by initial meaningful ramp of Inc AMZN custom silicon combined with ongoing recovery in Storage/Switches," he added.

Roth Capital Partners: "MRVL guided to high-single-digit revenue growth reflecting continued AI infrastructure demand coupled with stabilizing non-AI segments," Desilva wrote. He added that the company continues to AI revenue growth opportunity in the coming quarters, "with significant visibility provided by the ramp of large customer AI semiconductor programs across multiple hyperscalers."

Marvell Technology could generate strong growth "with increasing deployment of AI infrastructure as well as with a recovery in traditional cloud data center spending in the back half of the year," the analyst stated.

MRVL Price Action: Shares of Marvell Technology had declined by 9.07% to $69.88 at the time of publication on Friday.

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Posted In: Analyst ColorEarnings MissesPrice TargetReiterationAnalyst RatingsMoversTrading IdeasBofA SecuritiesC.J. MuseCantor FitzgeraldHans MosesmannHarlan SurHarsh KumarJPMorganNeedhamOppenheimerPiper SandlerQuinn BoltonRick SchaferRosenblatt SecuritiesROTH Capital PartnerssemiconductorsStifelStories That MatterSuji DesilvaTore SvanbergVivek Arya
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