Core Insights - Astera Labs and Marvell Technology are positioned as key players in the rapidly growing AI and cloud infrastructure market, focusing on high-performance data connectivity solutions [1][3] - Both companies are expected to benefit from the increasing demand for AI workloads and cloud services, with significant long-term growth potential [3] Astera Labs - Astera Labs offers a specialized platform for AI infrastructure, integrating high-speed mixed-signal hardware with its COSMOS software suite, and its products are already utilized by leading hyperscalers [2] - The company anticipates capturing a significant share of a $12 billion total addressable market by 2028, particularly in the AI fabric interconnect space [9] - Astera Labs is also expanding its presence in general compute infrastructure, which includes new CPUs, SSDs, and network cards, providing stability and growth across various data center applications [12] Marvell Technology - Marvell Technology has seen a 78% year-over-year growth in its data center business, driven by demand for custom AI silicon and high-speed connectivity products [13] - The company reported $5.77 billion in revenues for fiscal 2025, with a 37% increase in second-half revenues compared to the first half, and a non-GAAP gross margin of 61% [14] - Marvell is trading at a forward price-to-sales ratio of 5.86X, which is below its historical median, indicating it is attractively valued compared to Astera Labs [16] Market Outlook - Analysts project an average price target of $111.46 for Astera Labs, suggesting a 68.7% upside, while Marvell Technology has an average price target of $111.79, indicating an 89.7% upside [19][20] - Marvell is recommended as a better investment option due to its scale, diversification, and strong strategic execution, while Astera Labs is still in earlier ramp-up stages and more dependent on specific product lines [21][24]

Core Viewpoint - Marvell's fiscal year 2025 results and fiscal year 2026 Q1 guidance slightly exceeded analyst expectations, yet the stock price dropped over 18% post-earnings announcement [1] Group 1: Earnings Performance - Fiscal year 2025 Q4 total revenue reached $1.82 billion, a quarter-over-quarter increase of 20% and a year-over-year increase of 27%, with data center revenue contributing 75% of total revenue [2][10] - Non-GAAP EPS for Q4 was $0.60, beating the consensus estimate of $0.59 by $0.01 [4] - Q1 guidance projects revenue of $1.88 billion (+/- 5%), slightly above the consensus of $1.87 billion, and non-GAAP EPS of $0.61 (+/- $0.05), also above the consensus [4] Group 2: Market Concerns - Analysts express concerns over potential slowdowns in spending on AI infrastructure by major hyperscale companies, which could impact data center revenue growth [2][5] - There are fears that competitors, possibly Broadcom, may capture market share from Marvell by securing contracts with hyperscale clients [2][8] - The S&P 500 index has seen widespread selling due to inflation concerns stemming from new government tariff policies, leading to a cautious outlook on Marvell's stock [2] Group 3: Revenue Breakdown - Data center revenue for Q4 2025 was $1.3658 billion, showing a quarter-over-quarter increase of 24% and a year-over-year increase of 78.5% [6] - Networking revenue for Q4 2025 was $171.4 million, with a quarter-over-quarter increase of 13.6% but a year-over-year decline of 35.3% [6] - Consumer segment revenue is expected to decline by 35% in Q1 2026, following a 38% year-over-year decline in Q4 2025 [10] Group 4: Future Outlook - Management anticipates a slowdown in revenue growth rates to single digits for the next quarter, contrasting with the double-digit growth seen in the previous two quarters [3][10] - The CEO indicated that revenue from a key hyperscale client is expected to grow in fiscal years 2026 and 2027, despite the current early-stage relationship and potential risks of client turnover [8][12] - The company reported a record operating cash flow of $1.68 billion for fiscal year 2025, a year-over-year increase of 22.6% [12] Group 5: Valuation and Investment Considerations - The recent sell-off has brought Marvell's expected P/E ratio closer to Broadcom's 29 times, suggesting that the stock may no longer be overvalued compared to its direct competitors [13] - Strong demand is noted in the optical business driven by 800G PAM and 400ZR products, with the next-generation 3nm 1.6T PAM DSP expected to ship in the second half of fiscal year 2026 [13][14] - Despite risks associated with reliance on a hyperscale client and potential spending slowdowns, the attractive valuation and strong product demand may present buying opportunities for traditional value investors [14]