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Investors are becoming increasingly bullish marvel technology‘s (NASDAQ:MRVL) Outlook. The stock is up 98% in the last year and 39% since the beginning of the year. Despite this significant price increase, Rosenblatt analyst Hans Mosesmann reiterated his Buy rating on the stock earlier this week, with a short-term price target of $100. Achieving this goal would cause the price to rise by 19% over the next 12 months.
Demand for Marvell’s semiconductor solutions related to artificial intelligence (AI) is increasing. As a result, analysts expect the company to return to growth in the near term, which is the main reason for the stock’s performance.
Marvell’s data center growth is accelerating
To facilitate AI workloads, the data center market is undergoing a major upgrade cycle. Nvidia So far, the company has been the pioneer of this opportunity, but it is spreading to other component and system manufacturers, including Marvell’s data infrastructure products.
Data center revenue accounted for 39% of Marvell’s business last quarter and grew 21% sequentially in the fiscal third quarter. Management had been guiding for data center revenue to grow in the mid-30s quarter-over-quarter in the fourth fiscal year, prompting analysts to raise their expectations.
Marvell is expected to report a decline in revenue for the full fiscal year 2024 (ending in late January 2024) before returning to growth in fiscal 2025. In terms of earnings, analysts expect EPS of $1.51 this year, growing to $3.75 per share after that. By 2027
The company’s stock’s high forward price-earnings ratio (P/E) of 40 times suggests that investors expect the company to outperform expectations, justifying the stock’s premium valuation. Maybe I have to do that. The company may continue to report weak overall revenue growth in the near term, but as long as data center revenue grows at a high pace due to AI demand, the stock could reach new highs in 2024. It is possible that it will continue.
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John Ballard has a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool recommends Marvell Technology. The Motley Fool has a disclosure policy.
Marvell Technology stock is trending up 19%, according to one Wall Street analyst, according to The Motley Fool
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