Nokia (NYSE:NOK) 2026 Conference March 18, 2026 11:30 AM ET Company ParticipantsDavid Heard - President of Network InfrastructureJulia Larikova - VP of Product Line ManagementRob Shore - Head of Optical Network MarketingRon Johnson - SVP and General Manager of Optical NetworksConference Call ParticipantsDaryl Inniss - Principal Market AnalystRyan Koontz - Senior AnalystNone - AnalystNone - AnalystModeratorThank you all for joining us at our 2026 OFC executive briefing. We know that your time is maybe the mo ...

Core Viewpoint - The recent selloff in Credo Technology Group Holding Ltd (CRDO) is considered excessive, with analysts maintaining an Overweight rating due to strong revenue projections and competitive positioning [1][2]. Group 1: Analyst Ratings and Projections - JPMorgan analyst Joseph Cardoso maintains an Overweight rating on CRDO, arguing that the current valuation reflects a near worst-case scenario, and competitive risks may be overstated [1]. - Needham reiterates a Buy rating with a price target of $220, projecting approximately $406 million in revenue for Q3, significantly above prior guidance of $340 million [2]. - Management anticipates mid-single-digit sequential quarterly growth and over 200% year-over-year revenue expansion in fiscal 2026, leading to increased revenue forecasts of $1.92 billion for 2027 and $2.30 billion for 2028 [2]. Group 2: Company Overview - Credo Technology Group Holding Ltd, founded in 2008, is a fabless semiconductor provider based in the Cayman Islands, with major operations in San Jose, California [3]. - The company specializes in high-speed connectivity solutions ranging from 100G to 1.6T for data centers, AI infrastructure, and enterprise networks, focusing on DSPs, SerDes IP, and active electrical cables [3].

Core Insights - Marvell Technology (MRVL) is a leading player in the AI-connectivity space, focusing on Ethernet, SerDes, DSPs, PCIe retimers, and switches, and has recently acquired Celestial AI to enhance its capabilities [1][9] Group 1: Acquisition and Technology - The acquisition of Celestial AI integrates the Photonic Fabric platform, transitioning from traditional copper connectivity to advanced photonic solutions [1][4] - Celestial AI's Photonic Fabric platform offers ultra-high bandwidth, low latency, and low power consumption, crucial for AI scale-up networking [2][3] - The technology provides hundreds of terabits per second of bandwidth with latency below 150 nanoseconds and energy efficiency around 2.5 pJ/bit, essential for hyperscale AI training systems [3] Group 2: Strategic Goals - Marvell expects the new business to achieve a $500 million annualized revenue run rate by fiscal 2028 and $1 billion by fiscal 2029, with the acquisition becoming accretive to non-GAAP earnings in the second half of fiscal 2028 [4][9] Group 3: Competitive Landscape - Marvell competes with Broadcom and Credo Technology in the connectivity market, with Credo experiencing strong growth in its AEC business and expanding its hyperscaler customer base [5][6] - Broadcom maintains a strong position in carrier Ethernet and telecom optical interconnects, which are critical for AI XPU connectivity [6] Group 4: Financial Performance and Valuation - Marvell's shares have declined by 14.8% year to date, contrasting with the Electronics - Semiconductors industry's growth of 53.8% [7] - The company trades at a forward price-to-sales ratio of 6.90X, lower than the industry's average of 8.46X [11] - Zacks Consensus Estimates project year-over-year earnings growth of 80.9% for fiscal 2026 and 21% for fiscal 2027, with recent downward revisions for fiscal 2027 [14]

Core Insights - Analog Devices (ADI) and Marvell Technology (MRVL) are key players in the AI semiconductor sector, providing essential solutions for AI data centers and high-performance computing [1][2] Group 1: Company Overview - ADI's data center revenues account for 20% of its total revenue, experiencing a 50% year-over-year growth in fiscal 2025, driven by demand for high-performance power delivery and optical connectivity solutions [3][5] - MRVL's AI connectivity portfolio includes various technologies aimed at enhancing AI infrastructure, with expectations for data center switch revenues to surpass $300 million in fiscal 2026 and $500 million in fiscal 2027 [8][9] Group 2: Growth Prospects - ADI anticipates continued growth in AI-driven infrastructure, with management projecting double-digit growth rates in relevant areas over the coming years [5] - MRVL has launched initiatives like the Golden Cable to accelerate AI infrastructure deployment, and its enterprise networking segment has shown strong performance, with revenues climbing 57% year-over-year [11][14] Group 3: Financial Performance - ADI's earnings estimates for 2026 imply a 24% revenue growth and a 40% earnings growth year-over-year, with recent upward revisions in earnings estimates [5][6] - MRVL's earnings estimates for 2026 suggest a 42% revenue growth and an 81% earnings growth year-over-year, although the estimates have remained unchanged in the past 30 days [14] Group 4: Stock Performance and Valuation - Over the past year, ADI shares have increased by 49.8%, while MRVL shares have decreased by 20.6% [10] - ADI is trading at a forward sales multiple of 12.35X, above its median of 10.15X, while MRVL's forward sales multiple is at 6.65X, below its median of 7.15X [18] Group 5: Investment Outlook - ADI is viewed as a safer near-term investment due to its steady exposure to AI through power and optical solutions, while MRVL presents higher growth potential but carries balance-sheet risks [19]

Financial Data and Key Metrics Changes - The company is nearing the end of a six-year capital expenditure (CapEx) cycle, which began in 2021, with significant investments aimed at expanding capacity in the U.S. [7][12] - The company reported a 13% growth in the first half of Q2, with expectations for continued acceleration in revenue growth [34][40] - The revenue opportunity supported by new investments could exceed $40 billion by 2030, depending on market demand [25][26] Business Line Data and Key Metrics Changes - The company has increased its exposure to high-growth markets, particularly industrial and automotive, from 40% in 2013 to around 70% in 2022 [10][11] - The company is focusing on embedded business, with new fabs designed to support high-speed analog and embedded products [15][23] Market Data and Key Metrics Changes - The industrial sector is showing broad recovery across all geographies and channels, with significant growth expected [40][41] - Automotive markets are recovering, particularly in China, driven by increased electric vehicle (EV) adoption [42][66] Company Strategy and Development Direction - The company is strategically investing in U.S. manufacturing to ensure geopolitical reliability and to better support customers [12][12] - The focus is on transitioning from older fabs to more efficient 300mm wafer fabs, which will significantly reduce costs and improve margins [102][104] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the semiconductor market, particularly in industrial and automotive sectors, and emphasized the importance of being prepared for demand surges [34][39] - The company is well-positioned to navigate geopolitical tensions and potential decoupling from China, viewing it as an opportunity rather than a risk [72][74] Other Important Information - The company is actively working on requalifying parts for different manufacturing locations to mitigate potential tariff impacts [91][92] - Management highlighted the importance of maintaining a diverse manufacturing footprint to support customer needs and market demands [12][66] Q&A Session Summary Question: What is the current state of the semiconductor market recovery? - Management noted a broad recovery in the industrial sector and a positive outlook for automotive markets, particularly in China, where EV adoption is increasing [39][42] Question: How is the company managing inventory levels? - The company is deliberately holding higher inventory levels to prepare for demand fluctuations and to avoid capacity constraints experienced in previous cycles [46][52] Question: What are the implications of tariffs and geopolitical tensions? - Management indicated that current tariffs have not significantly impacted operations, and the company is prepared for potential changes in the geopolitical landscape [62][64]