Marvell Technology (MRVL stock) ( NASDAQ:MRVL ) declined by about 7% on Friday after the semiconductor company reported weaker-than-anticipated third-quarter results and forecast. However, analysts emphasized that the business’s long-term trends are still in place, despite going through a difficult “reset.”
Despite the inventory adjustment that negatively affected the quarter and guidance, Cowen analyst Matthew Ramsay observed that the company’s long-term growth drivers, including cloud computing, 5G, custom silicon, and automotive, are still present.
Ramsay stated in a letter to clients that “overall, despite [near-term] weakness and broad inventory decomposition, we remain constructive on underlying secular demand drivers in Marvell’s major Cloud and 5G areas, with Auto beginning to gain pace as well.”
In 2023, new CPU and GPU platforms from Intel ( NASDAQ:INTC ), Advanced Micro Devices ( NASDAQ:AMD ), and Nvidia ( NASDAQ:NVDA ) will launch and ramp up, and Ramsay said Marvell ( NASDAQ:MRVL ) is “ideally positioned” to profit from these developments.
Ramsay did, however, cut his forecasts for the fiscal year 2024 in light of the inventory adjustment that the company noted in relation to its storage business, as well as cautionary language in relation to its wired infrastructure and consumer businesses.
Tore Svanberg, a Stifel analyst who rates Marvell ( NASDAQ:MRVL ) as a buy, stated that the company’s third-quarter profitability was “impressive,” pointing to its 64% gross margins and 36.7% operating margins. However, the ongoing correction is likely to dampen investor sentiment, at least in the short term.
“While we have revised downward our [estimated...
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