To The Moon

Yesterday, after the announcement of the higher-than-expected results, Nvidia $NVIDIA Corp(NVDA)$ came to a high opening and went low, which is disgusting!

The king of the Semiconductor fell, and other stocks fell more sharply, including Marvell $Marvell Technology(MRVL)$ , which supplies Nvidia indirectly.

Surprisingly, the founders of Marvell are Chinese couples. Among them, Sehat Sutardja was born in a Chinese family in Indonesia, and his wife Dai Weili was born in Shanghai, who is the only female founder of a major company in the semiconductor and IT industries!

Although the couples are not related to the mainland, yellow skin is really important in the semiconductor industry. Jensen Huang, Nvidia CEO, was born in Taiwan, and AMD $Advanced Micro Devices(AMD)$ is under the leadership of Su Zifeng to come back to life, plus TSMC $Taiwan Semiconductor Manufacturing(TSM)$ and Marvell, which at least shows one thing, that is, in the top semiconductor technology industry, yellow skin have unlimited potential, encouraging the domestic semiconductor industry!

Marvell is a leading global semiconductor manufacturer providing a full range of broadband communication and storage solutions for high-speed, high-density, digital data storage and broadband digital data network markets, engages in the design, development and supply of mixed signal and digital signal processing integrated circuits.

The company has a variety of product layout in the optical module industry, such as clock data recovery chip (CDR), optical receiving device (ROSA), trans-resistance amplifier (TIA) and so on.

Optical module is one of the core devices in the field of optical communication, and is widely used in data centers with Ethernet switches. The optical module works at the physical layer to achieve photoelectric conversion: turning the optical signal into an electrical signal, and turing the electrical signal into optical signal. It is also known as the magician of communications.

In addition to optical modules, data center IT equipment mainly includes connectors (optical fiber, optical modules), network equipment (switches, routers), computing devices (servers), storage devices (memory) ,etc., among which, Marvell has a variety of products to supply.

As a result, the data center is the largest source of revenue for Marvell, and the company beat expectations in the second quarter of fiscal year 2024, driven by AI demand.

Specifically, revenue in the second quarter of FY24 was $1.34 billion, down 11.6% year on year, but exceeded analyst expectations of $1.33 billion, and also exceeded the median management guidance.

By business, the data center is the company's largest revenue source, revenue in the second quarter of fiscal year 2024 was $460 million, down 28.5%; Enterprise networking revenue was $330 million, down 3.7% year-on-year; Carrier infrastructure revenue was $280 million, down 3.4% year-over-year; Consumer revenue was $170 million, up 2% year-over-year; Automotive/Industrial revenue was $110 million, up 31.8% year on year:

On a sequential basis, the data center growth of 6% in the second quarter of FY24 was much higher than the company's previous guidance, mainly due to growing demand for optical products to meet the continued expansion of cloud artificial intelligence deployments. The year-on-year decline is mainly due to weak demand on the enterprise side, and AI revenue is not enough to drive overall growth.

Affected by inventory adjustment, the growth rate of enterprise networking changed from growth to decline in the quarter, and the company expects that inventory normalization will still take several quarters.

Under the economic downturn, Carriers are also reducing capital expenditure, but in the second quarter of FY2024, the consumer business has picked up, the revenue growth rate has changed from decline to increase, and the company expects that the third quarter will continue to grow quarter-on-quarter.

Looking ahead to the next quarter, the company forecast revenue to be in the $1.4 billion range, plus or minus 5%. GAAP gross margin is expected to be in the range of 45.6% to 48%, and non-GAAP gross margin is expected to be in the range of 60.3% to 61.3%.

From the guidance point of view, the revenue and profit of Marvell will warm up, and the performance end has reached the bottom:

However, due to the large increase in the stock price and the substantial increase in valuation, the stock price may still tend to be volatile before the performance increases: