2024-04-04 05:46:26 ET
Summary
- Marvell's data center revenue grew rapidly in FY2024, with the segment now accounting for more than half of its total revenue, up from just a third one year ago.
- The growth in the data center segment was driven by the cloud portion of the data center end markets, particularly AI.
- Marvell expects continued growth in the data center segment, as well as potential growth from its cloud optimized silicon platform.
- While the enterprise networking and carrier end markets are weak today, management expects both to see a recovery starting from the second quarter and both to reach $1 billion revenues gradually over time.
- I do think we will see a favorable setup for Marvell in the second half of FY2025 as the company does not have growth drivers from the data center end market, but also a recovery in carrier, enterprise and consumer while automotive continues to grow well.
Marvell Technology ( MRVL ) has had a tale of two cities given that it is one of the main beneficiaries of the growing demand for AI data centers, but at the same time, its enterprise and carrier businesses are experiencing a cyclical downturn.
As a result, we are not seeing strong growth at the company level given the strong growth from the data center end market is offset by weakness in these other markets.
That said, I think for forward looking investors, the second half of FY2025 could be an interesting year for the company as the recovery of the enterprise and carrier businesses are expected, and alongside the strong growth in data center end market will drive earnings growth upside....
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Marvell Technology: Favorable Setup For A Turnaround