Marvell Technology (MRVL) might face some share pressure, mostly from Broadcom (AVGO), but the solid underlying demand should more than counter any incremental share loss, Morgan Stanley said Monday.
Morgan Stanley is most constructive on Marvell's optics opportunity and it believes management's growth guidance for interconnect is conservative, given the strength across the artificial intelligence networking ecosystem.
Morgan Stanley sees Marvell's custom silicon growth guidance of 20% for calendar year 2026 as reasonable, with minimal contribution from the next major application-specific integrated circuit program. The firm said it is more conservative on the opportunity in calendar year 2027, which seems dependent on Microsoft's (MSFT) Maia chip.
The Celestial AI acquisition will start contributing to revenue in Q3 fiscal 2028, adding about $125 million to revenue in Q4, the firm said. Analysts expect a continued ramp through fiscal 2029, ending Q4 FY2029 with about $250 million in revenue. The firm lowered its earnings estimates by $0.19 and $0.15 in FY2027 and FY2028, respectively, following these changes.
For the April quarter, the brokerage models revenue of $2.278 billion, in-line with Street at $2.271 billion and EPS of $0.75, also in-line with consensus.
Morgan Stanley lowered its price target on Marvell to $95 from $112 and maintained an equal-weight rating.
Price: 80.83, Change: -0.86, Percent Change: -1.06
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