Credo Technology Group Holding Ltd (CRDO) is emerging as a powerhouse as the world races to build the next generation of AI data centers. Credo has seen explosive growth, with fiscal 2025 revenues hitting $436.8 million, a 126% year-over-year increase driven by strong demand for its innovative and energy-efficient high- performance connectivity solutions. Demand continues to accelerate, particularly among hyperscaler customers supporting advanced AI services. In the fourth quarter of fiscal 2025, revenues s ...

Key Takeaways MRVL projects Q2 revenues to be $2B ( /-5%), up 57.4% year over year and 5.5% sequentially. Custom AI silicon is now the largest driver of MRVL's fast-growing data center revenues. MRVL ramps investments in 2.5D packaging and custom ASICs to scale AI chip production.Marvell Technology (MRVL) delivered approximately $1.9 billion in revenues for the first quarter of fiscal 2026, up 63% year over year, driven by explosive growth in its Data Center end market. Management now forecasts its second ...

Key Takeaways MRVL's data center unit jumped 76% Y/Y in Q1 FY26, led by strong custom AI silicon and optics demand. Partnership with NVIDIA and new 2.5D packaging platform fuel MRVL's AI XPU scalability and cost control.Marvell Technology’s (MRVL) custom AI silicon chips are experiencing massive traction among hyperscalers, which is evident in the high-growth rate of Data Center end-market revenues. The custom AI silicon chips mainly account for Marvell’s custom AI XPUs and electro-optics solutions.Marvell ...

Core Viewpoint - Marvell Technology's shares have declined 30.4% over the past three months, underperforming its peers in the semiconductor industry, raising concerns about whether investors should hold or exit the stock [1][2]. Group 1: Reasons for Underperformance - Rising trade tensions and slowing economic growth have pressured the technology sector, leading to widespread sell-offs in tech stocks [3]. - Approximately 43% of Marvell Technology's total revenues for fiscal 2025 are generated from the Chinese market, making the company's performance sensitive to U.S.-China relations [3][4]. - Weakness in the consumer end market, particularly due to volatility in gaming demand and irregular order patterns in the industrial sector, has contributed to investor concerns [5]. Group 2: Growth Opportunities - Rapid adoption of AI by enterprises is driving growth in Marvell Technology's data center segment, which is the company's largest segment [6][9]. - The company is positioned to benefit from the increasing reliance of hyperscalers on custom silicon for AI workloads, with strong momentum in electro-optics products and next-generation switch divisions [9][10]. - The transition from copper to optical connectivity in AI infrastructure presents a significant growth opportunity for Marvell Technology's Co-Packaged Optics technology [11]. Group 3: Financial Outlook - The Zacks Consensus Estimate for Marvell Technology's 2026 revenues is projected at $8.2 billion, indicating a year-over-year growth of 42%, with earnings expected to increase by 75.2% year-over-year to $2.75 per share [12]. - Marvell Technology has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 3.6% [12]. Group 4: Valuation - The recent stock price drop has resulted in a forward 12-month price-to-sales (P/S) multiple of 6.11x, significantly below its one-year median of 9.82x and the industry average of 7.90x, making it an attractive buy for investors [13][16]. - Compared to peers, Marvell Technology's valuation is lower, with Broadcom and Ambarella at 17.13x and 6.11x respectively, while Qualcomm trades at 3.67x [16]. Group 5: Conclusion - Despite facing headwinds such as U.S.-China tensions and rising costs due to new tax policies, Marvell Technology has strong long-term fundamentals supported by its position in the data center and high-speed networking markets [17][18]. - The company's investment in AI provides long-term potential, suggesting that retaining MRVL stock is advisable at present [18].

Financial Data and Key Metrics Changes - Marvell reported record revenue of $1,895 million for the first quarter of fiscal year 2026, reflecting a 4% sequential increase and a strong 63% year-over-year growth [4][24] - Non-GAAP earnings per diluted share reached $0.62, representing a year-over-year growth of 158%, which is more than double the pace of revenue growth [24][26] - GAAP gross margin was 50.3%, while non-GAAP gross margin was 59.8% [24][25] Business Line Data and Key Metrics Changes - Data center revenue was $1,440 million, growing 5% sequentially and 76% year-over-year, driven by AI demand [7][24] - Enterprise networking revenue was $178 million, and carrier infrastructure revenue totaled $138 million, collectively growing by 14% sequentially [17] - Consumer revenue was $63 million, representing a 29% sequential decline, but is expected to grow by approximately 50% sequentially in the next quarter [18] - Automotive and industrial revenue was $76 million, declining by 12% sequentially, with expectations of flat revenue in the next quarter [18] Market Data and Key Metrics Changes - The data center end market contributed 76% of total revenue, indicating its dominance in Marvell's business [24] - The company anticipates continued growth in the data center market, particularly driven by custom AI silicon programs [19][22] Company Strategy and Development Direction - Marvell is focusing on expanding its custom silicon business, particularly in AI infrastructure, and plans to host an investor event to showcase its technology [20][22] - The company announced the sale of its Automotive Ethernet business to Infineon for $2,500 million, which will provide additional flexibility in capital allocation [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite macroeconomic uncertainties, with expectations for strong demand in AI and data center markets [19][22] - The company is closely monitoring the broader environment to assess potential long-term impacts on its business [19] Other Important Information - Marvell significantly increased stock repurchases to $340 million in the first quarter, up from $200 million in the prior quarter [5][27] - The company expects second quarter revenue to be around $2,000 million, representing a 57% year-over-year growth [6][28] Q&A Session Summary Question: What is the direction of content in next-generation programs? - Management indicated that they are the incumbent supplier for AI XPUs and expect revenue to continue to grow on a multiyear basis with their customers [33][36] Question: How does Marvell plan to support a broader customer base? - Management confirmed that they have the capacity to expand their portfolio and engage with multiple customers, particularly in the AI and data center space [41][42] Question: Can you discuss Marvell's service technology for 200 gig SerDes? - Management stated that their SerDes technology remains best in class, with strong performance and a solid roadmap for future developments [47][48] Question: Can you break down data center revenue and AI's contribution? - Management noted that AI has become the majority of data center revenue and expects this trend to continue, with strong growth anticipated in custom silicon [55][56] Question: What are the expectations for the second half of the year? - Management expects growth across all business segments, driven by strong demand in AI and a recovery in enterprise networking and carrier infrastructure [66][67] Question: Can you provide insights on the optical business and market share? - Management confirmed strong market share in the 800 gig segment and expects continued growth in the optical business, particularly with the transition to 1.6T [116][120]

Core Viewpoint - Marvell Technology, Inc. is expected to report strong growth in its first-quarter fiscal 2026 results, primarily driven by its AI-driven data center business, which has seen significant adoption and revenue growth in recent quarters [1][2]. Data Center Growth - The data center segment is a key growth driver for Marvell Technology, with record revenues of $1.37 billion in the fourth quarter of fiscal 2025, reflecting a 78.5% year-over-year increase and 24% sequential growth [3]. - For the first quarter, data center revenues are anticipated to grow in mid-single digits sequentially, with estimates suggesting revenues will reach $1.395 billion, indicating a robust 71% year-over-year growth [4]. Custom AI Silicon - Marvell Technology is experiencing strong demand for its custom AI silicon, which has allowed the company to deepen collaborations with hyperscale customers [5][6]. - The company has ramped up its 100-billion-transistor AI accelerators, enhancing its competitive edge in the AI data center market [6]. Electro-Optics and Networking - Marvell's electro-optics and high-speed networking segments are also expected to significantly contribute to first-quarter revenues, with strong order momentum for its 800-gig PAM and 400ZR interconnect solutions [7]. - The company has begun shipments of its 1.6T PAM DSP technology, which improves bandwidth efficiency and energy savings, further supporting its growth in the data center interconnect market [8]. Consumer and Industrial Market Weakness - Marvell's industrial business is facing challenges with lumpy order patterns, and revenues in this segment are expected to decline in high-single digits sequentially [9]. - The consumer end market is projected to see a revenue decline of approximately 35% sequentially due to gaming seasonality [9]. Financial Estimates - The Zacks Consensus Estimate for Marvell Technology's fiscal first-quarter revenues is $1.88 billion, indicating a year-over-year rise of 68.6% and a sequential growth of 3.5% [10]. - The consensus estimate for first-quarter earnings is 61 cents per share, reflecting a year-over-year growth of 154.7% and a sequential rise of 1.7% [10].

Core Viewpoint - Marvell Technology, Inc. has experienced significant stock volatility, losing 17.3% over the past year, which is a stark contrast to the 11.5% growth in the Zacks Electronics - Semiconductors industry [1][4]. Market Performance - The decline in Marvell's stock price is attributed to broader market weaknesses, including a sell-off in tech stocks due to rising trade tensions, particularly concerning the U.S. government's actions towards China [4][5]. - Approximately 43% of Marvell's total revenues for fiscal 2025 are generated from the Chinese market, making geopolitical tensions a significant concern for the company [4][5]. Growth Opportunities - Marvell is benefiting from the increasing demand for custom silicon in AI workloads, with AI-based revenues exceeding the $1.5 billion target in fiscal 2025 and expectations to surpass $2.5 billion in fiscal 2026 [6][10]. - The company is positioned as a leader in high-performance computing, supported by collaborations with major hyperscalers, which are expected to drive revenue growth from custom XPU solutions in fiscal 2027 and beyond [7][10]. Technological Advancements - Marvell is capitalizing on the shift towards enhanced networking and interconnect products in data centers, introducing high-speed optical interconnects that reduce power usage by 20% [8][9]. - The transition from copper to optical connectivity in AI infrastructure presents a substantial growth opportunity, with Marvell's Co-Packaged Optics technology and 2nm silicon IP development reinforcing its market position [9]. Financial Outlook - The Zacks Consensus Estimate for Marvell's 2026 revenues is projected at $8.3 billion, indicating a year-over-year growth of 43.8%, with earnings expected to reach $2.76 per share, reflecting a 75.8% increase [10]. - Marvell has consistently beaten the Zacks Consensus Estimate in the past four quarters, with an average surprise of 4.3% [10]. Strategic Collaborations - Marvell has established partnerships with industry leaders like NVIDIA, Juniper Networks, and Coherent Corp. to develop high-speed networking technology tailored for AI workloads [11][12][13]. - These collaborations aim to integrate Marvell's optical interconnect solutions with NVIDIA's AI technology and create networking solutions that support AI, cloud, and 5G applications [12][13]. Valuation - The recent drop in stock price has resulted in a forward 12-month price-to-sales (P/S) multiple of 5.59X, significantly lower than its one-year median of 10.16X and the industry average of 6.81X, making it an attractive investment option [14]. Conclusion - Despite facing near-term challenges, Marvell's strong fundamentals and position in the data center and high-speed networking market suggest that the stock remains a viable hold for investors [17][18].