Marvell Technology Projects 33% Surge in AI Revenue for 2025 Amid Growing Demand

November 29, 2024
Marvell Technology Projects 33% Surge in AI Revenue for 2025 Amid Growing Demand
  • Marvell Technology, Inc. is a leading semiconductor company focused on custom compute and optical solutions, particularly in the rapidly growing artificial intelligence (AI) sector.

  • Despite facing slight gross margin declines due to the ramp-up of custom compute solutions, operating margins are expected to expand significantly by about 280 basis points in the third quarter of fiscal 2025.

  • Marvell's AI revenues are projected to exceed $1.5 billion in fiscal year 2025 and reach approximately $2.5 billion by fiscal year 2027, bolstered by partnerships with major tech firms like Amazon, Google, and Microsoft.

  • The company's growth is primarily driven by strong demand for AI products, especially in data center application-specific integrated circuits (ASICs), networking, and electro-optics.

  • Looking ahead, Marvell expects a 15% total revenue increase and a remarkable 33% surge in AI revenues for the fiscal fourth quarter of 2025, underscoring its robust market position.

  • Analysts anticipate that Marvell's management may revise their AI sales targets upward, projecting $1.5 billion for fiscal 2025 and $2.5 billion for fiscal 2026 due to rising demand.

  • The company's Carrier/Enterprise Networking segment is recovering, with a projected 5% growth in the upcoming quarter, supported by increased enterprise and carrier spending.

  • Rosenblatt maintains a 'buy' rating for Marvell, with a price target of $120, reflecting a potential upside of about 30% as investor interest in AI chip applications grows.

  • For fiscal 2026, Rosenblatt forecasts a 31% revenue increase to $7.2 billion, largely driven by AI-related products and an expanding market share.

  • For the October quarter, analysts project Marvell will achieve approximately $1.45 billion in revenue, with a non-GAAP profit of around 40 cents per share.

  • Marvell is set to report its third-quarter earnings on December 3, 2024, after market close, which will provide further insights into its financial performance.

  • However, potential risks remain, including ongoing gross margin pressures that could impact short-term profitability and vulnerabilities in the networking sector due to economic downturns.

Summary based on 3 sources


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