Marvell Sees AI Chip Growth Despite Temporary Headwinds in Other Units
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Marvell Technology makes chips for AI, data centers, networking, and other areas. It sees big growth potential in AI but some of its businesses face short-term headwinds.
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Data center and carrier infrastructure segments, making up 41% of revenue, face weak demand temporarily. However, long-term opportunity remains strong.
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AI revenue is growing rapidly, expected to reach $800 million by 2025. Edge computing using custom ASICs chips for AI inference could further boost growth.
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Margins and earnings under pressure currently due to inventory correction and macro weakness. But cost cuts should lead to rebound in profitability.
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Stock seems expensive based on traditional valuation metrics. But long-term growth story still attractive for patient investors, making stock a potential buy on dips.