Marvell Shares Strengthen Position in AI Chip Market Against NVIDIA News ad

There’s no doubt about dominance NVIDIA Company NASDAQ: NVDA fueling the AI ​​revolution now and for the foreseeable future as they make even faster strides in their chips. However, a 12-month backlog in the development of Blackwell’s next-generation GPU architecture is forcing many customers in the computing and technology sector to look elsewhere in the meantime.

Enter Marvell Technologies Inc. NASDAQ:MRVL and him custom-designed AI integrated circuit chips (ASICs) that are loaded with hyperscalers..

These chips are designed for specific tasks and often provide higher performance at lower costs for certain AI workloads. Marvell CEO Matthew Murphy said the company is entering a “new era of growth” driven by demand for its ASICs.

Expanding your niche for hyperscalers

While NVIDIA’s dominance in AI is driven by the embedded nature of its full-featured ecosystem, consisting of powerful GPU architectures (Hopper and Blackwell), its software platform (CUDA) and development kits, networking solutions, partnerships, and a loyal and growing developer community Marvell ASICs are not replacing NVIDIA Hopper AI chips. Instead, they are improving specific AI workloads tailored to the needs of the hyperscaler.

Custom ASICs for Microsoft, Amazon and Google Cloud

Marvell delivers significant data center revenue growth with four custom ASICs.

ASIC Maia-2 is a client-side artificial intelligence accelerator designed for Microsoft Company NASDAQ: MSFT Azure platform specifically for training and inference workloads.

ASIC Axion is specially designed for Alphabet Inc. NASDAQ: GOOGLE Google Cloud. This is a custom processor specifically designed for Google data centers to optimize certain workloads for its cloud platform.

Trainium is specially designed for Amazon.com Inc. NASDAQ: AMZN Amazon Web Services (AWS) for training large and complex machine learning models and supporting artificial intelligence services.

Inferentia is also an ASIC specifically designed for Amazon. As the name suggests, it is purpose-built as an AI inference accelerator for AWS. It is designed to work efficiently with already trained AI models and is optimized for inference at scale.

Marvell competes with Broadcom Inc. NASDAQ: AVGO and their ASICs. Broadcom was involved in the development of Google’s Tensor chip and is reportedly developing an ASIC for OpenAI.

Growth surge began in Q3: Data center revenue grew 98% YoY in Q3

Marvell reported third-quarter fiscal 2024 earnings per share of 43 cents, beating the consensus estimate by 2 cents. Revenue rose 7% YoY to $1.52 billion, well ahead of the $1.46 billion consensus estimate but up 19% sequentially. Non-GAAP gross margin was 60.5%. Data center revenue grew 98% YoY and 20% QoQ to $1.1 billion, accounting for 73% of total revenue, up from 40% in the same period last year.

Data center revenue began to recover in the third quarter

Non-data center revenue began to recover in the third quarter. Revenue from enterprises and mobile operators increased by 4% compared to the previous quarter. Growth in the fourth quarter is expected to be in the mid-teens. Automotive and industrial revenue fell 22% YoY but grew 9% QoQ. Revenue in the fourth quarter is expected to grow at a low to mid-single digit growth rate on a quarterly basis. Although consumer income fell 43% YoY, it grew 9% QoQ. Marvell expects a seasonal decline in the fourth quarter mid-quarter.

Marvell issues guidance on FQ4 prospects

For the fourth quarter of fiscal 2025, Marvell expects earnings per share to range from 54 cents to 64 cents, compared with the consensus estimate of 52 cents. Revenue is expected to be between $1.71 billion and $1.89 billion, compared with the consensus estimate of $1.65 billion.

CEO Matt Murphy commented: “The exceptional results in the third quarter and our strong outlook for the fourth quarter are primarily driven by our custom silicon AI programs now in volume production, further supported by strong ongoing demand from cloud customers in our market. . -leading internetworking products. We look forward to a strong finish to this fiscal year and expect the strong momentum to continue into fiscal 2026.”

MRVL triggers ascending triangle breakout

An ascending triangle consists of a flat-topped upper resistance line converging with an ascending (rising) lower support line. A breakout occurs when a stock breaks the upper trend line.

MRVL formed flat-top upper trendline resistance at $94.95, which coincided at the apex with an ascending lower support line. Upper trendline resistance tested and failed two previous breakout attempts, but pullbacks were shallow at the higher lows. The daily fixed VWAP support is $92.16. The breakthrough prompted the company to release its third-quarter earnings report and raise its guidance. Shares rose from $98.72 to $109.57, forming gap-fill levels. MRVL initially peaked at $119.88, setting a 52-week high. The daily RSI is at the 74-band level. Fibonacci (Fibonacci retracement support levels are located at $109.57, $104.28, $98.72 and $87.58.

The average consensus price target for MRVL is $119.04which implies a growth potential of 4.87%. and his highest analyst price target is US$140. Has 24 analysts Buy ratings and two hold ratings. The short interest on the stock is 2.3%.

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