Marvell Technology’s Price Target Raised to $80 on AI Demand Trends
Investment bank BofA has raised the price target for Marvell Technology to $80 per share from $68, citing the company’s custom AI chip ramp. The decision was made after BofA analysts met with Marvell Technology’s management team at the CES tradeshow in Las Vegas. The team noted strong cloud AI demand trends at the company, prompting the price target increase.
BofA Analysts Note Solid Cloud AI Demand Trends at Marvell Technology
During their meeting with Marvell Technology’s management team, BofA analysts observed solid cloud AI demand trends. Marvell Technology, along with other key vendors such as NVDA, AVGO, and AMD, is supplying critical compute and networking parts to cloud customers. This positive feedback points to a growing market for Marvell Technology in the AI sector.
MRVL’s Custom AI Chip Ramp Could Exceed Previous Expectations
One of the major takeaways from the meeting was the potential for Marvell Technology’s custom AI chip ramp to exceed previous expectations. BofA analysts initially assumed a ramp of $250 million to $450 million for CY24/25E. However, the discussions with Marvell Technology’s management team suggest that the ramp could be 1.5-2 times larger, indicating a significant growth opportunity.
Custom Silicon Could Play a Bigger Role for Marvell Technology
As the demand for custom silicon and accelerators continues to drive market growth, Marvell Technology sees a potential for custom silicon to become a much larger part of their business. This shift could open up new opportunities for the company to capitalize on the growing AI market and strengthen its position as a key player in the industry.
Marvell Technology’s CY24 AI Revenue Exceeding Previous Targets
Initially, it was projected that Marvell Technology’s CY24 AI revenue would reach $800 million, with a majority coming from optics. However, due to the increasing traction of custom silicon, BofA analysts now expect the revenue to surpass previous targets. While optics will still play a significant role, the growing demand for custom silicon is driving the revenue beyond initial projections.
In conclusion, Marvell Technology’s price target has been raised to $80 per share based on the company’s custom AI chip ramp. BofA analysts have noted strong cloud AI demand trends at Marvell Technology, indicating a positive market outlook. The potential for Marvell Technology’s custom AI chip ramp to exceed expectations highlights a significant growth opportunity. Custom silicon could also play a larger role for Marvell Technology as demand for accelerators and custom silicon continues to rise. As a result, Marvell Technology’s CY24 AI revenue is expected to exceed previous targets, driven by both optics and the growing demand for custom silicon.
Analyst comment
Positive news: Marvell Technology’s price target has been raised to $80 per share due to strong cloud AI demand trends and the potential for their custom AI chip ramp to exceed expectations. Custom silicon is projected to play a larger role, leading to higher revenue than initially projected. As an analyst, I expect the market to respond favorably to this news, leading to increased investment and growth for Marvell Technology.
