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Marvell Technology Inc (NASDAQ:MRVL) shares climbed in early trading on Friday, after the company reported upbeat second-quarter sales.
The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.
Analyst Toshiya Hari maintained a Buy rating while lifting the price target from $77 to $87.
Marvell Technology reported its first beat-and-raise in five quarters, with fiscal second-quarter revenue at $1.27 billion, representing 10% sequential growth but a 5% year-on-year decline, Hari said in a note. The figure came in 2% higher than consensus, he added.
Management guided to fiscal third-quarter revenue of $1.45 billion and expressed confidence in "significantly exceeding its FY2025/26 AI revenue targets of $1.5bn/$2.5bn, respectively," the analyst stated.
"Supported by strong bookings and a robust backlog, we believe Marvell's forward visibility has improved in both Custom Compute and Electro-Optics," he further wrote.
Analyst Tore Svanberg reiterated a Buy rating while raising the price target from $90 to $95.
Marvell Technology reported its July quarter results above midpoint, "as DC/AI revenue continues to accelerate," Svanberg said.
The company raised its October outlook, "driven primarily by DC/AI, in addition to sequential recoveries in Carrier Infrastructure and Enterprise Networking," he added.
The analyst stated Marvell is on track to surpass its previous AI revenue guidance for fiscal 2025 and 2026 of $1.5 billion and $2.5 billion, respectively.
"Once again, we remain impressed with MRVL's execution within the DC/AI space, even as the company's other end markets resume sequential growth," he further wrote.
Check out other analyst stock ratings.
Analyst Harlan Sur reiterated an Overweight rating and price target of $90.
"Marvell's AI design win pipeline is starting to inflect meaningfully higher in the 2H," Sur said in a note. The company could ship $575 million to $600 million in AI ASICs this year and exit the year with a quarterly run rate of $300 million, he added.
"Just as important, the company's cyclical businesses are now inflecting higher and the AI/cyclical tailwinds will continue into CY25, in our view, and catalyzing a multi-quarter period of positive EPS revisions," the analyst wrote.
Marvell continues to execute on its long-term growth initiatives and is likely to generate "above-industry growth mid-/longer term," he further stated.
Analyst Harsh Kumar reaffirmed an Overweight rating and price target of $100.
Marvell reported "solid" quarterly results, with all of its end markets "set to recover in the upcoming October quarter," Kumar said. "These include markets that have been declining or stagnant for some time, including carrier, storage, and enterprise," he added.
The company seems to have "hit an inflection with its custom silicon business which is set for significant growth sequentially in October," the analyst wrote.
"While custom silicon inherently has lower gross margin but higher operating margin, management feels like a base of 61% plus margin can be maintained going forward given concurrent growth in the merchant business with higher gross margins," he further wrote.
Analyst C.J. Muse reiterated an Overweight rating and price target of $85.
"Following fits and starts over the last year, Marvell finally delivered the goods on its solid AI story overnight," Muse wrote in a note. The company posted a revenue beat, "driven by Data Center outperformance," he added.
Marvell's guidance was "solidly above consensus, led by AI and Data Center, which the company expects to grow in the high-teens percentage sequentially," the analyst said.
"Overall, we see this report as an important inflection for Marvell, with likely upside to the ever-important AI revenues into CY25 and beyond, coupled with growing tailwinds from the more cyclical businesses," he further stated.
MRVL Price Action: Shares of Marvell Technology had risen by 7.03% to $74.75 at the time of publication on Friday.
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Posted In: MRVL
