Why Analysts Are Bullish on Marvell Despite Sector Weakness
Marvell Technology (NASDAQ: MRVL) is a semiconductor stock gaining hype due to its fast data center revenue growth. It has performed well over the past 52 weeks but is underperforming in its sector. The stock is up 36%, while the Invesco PHLX Semiconductor ETF (NASDAQ: SOXQ) is up 44%. The fund tracks the PHLX Semiconductor Index, a commonly used barometer of the industry’s performance.
Three Wall Street analysts who recently updated their price targets see a solid upside in the stock. The average of Evercore ISI, KeyBanc, and Rosenblatt’s price targets implies an upside of 27%.
So, where exactly does Marvell fit within the industry, and what are its main sources of revenue and growth? We’ll answer those questions by diving into the firm’s annual report and its past two quarterly releases. I’ll close by detailing Marvell’s place in one particularly important market.
Data Center Business is Booming, but Other Segments Are Suffering
Marvell is a fabless chip designer like Nvidia. This means it designs its chips but doesn’t manufacture them. Marvell Technologies serves five large end markets: data center, enterprise networking, carrier infrastructure, consumer, and automotive/industrial. The data center market made up 40% of the company’s revenues in 2023. However, in Q1 of 2024, that number jumped to 70%.
Enterprise networking, which provides products for companies to connect and share their data between …
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