Core Insights - The article compares two semiconductor companies, Credo Technology Group Holding Ltd. (CRDO) and Marvell Technology, Inc. (MRVL), both of which are integral to the infrastructure supporting AI-driven data centers [1][2]. Group 1: Company Overview - CRDO specializes in high-speed connectivity solutions, particularly in its AEC product line, which has seen significant growth due to its reliability and lower power consumption compared to optical solutions [4][5]. - Marvell has a diversified product portfolio, focusing on custom ASICs, data center switches, and 5G chips, with a strategic pivot towards the data center market [9][10]. Group 2: Financial Performance - CRDO reported a strong fiscal first quarter, with three hyperscalers contributing over 10% of revenues, and anticipates continued revenue growth from these clients [5][8]. - MRVL's data center revenues surged 69% year over year, with a significant contribution from custom silicon and electro-optics, making data center the largest segment for the company [9][11]. Group 3: Growth Drivers - CRDO's growth is driven by its AEC business, optical solutions, and PCIe retimer products, with expectations of substantial revenue growth in fiscal 2026 [6][7][8]. - MRVL's growth is supported by its custom XPU products and a robust design pipeline, with management targeting a significant increase in market share in the data center space [11][12]. Group 4: Market Position and Valuation - CRDO's stock has increased by 76% over the past three months, while MRVL's stock has declined by 1.7% during the same period [9][16]. - In terms of valuation, CRDO has a forward price/sales ratio of 26.94X, which is higher than MRVL's 7.17X, indicating differing market perceptions [18]. Group 5: Analyst Estimates - Analysts have significantly revised earnings estimates for CRDO upwards, while MRVL has seen only minor revisions [20][21]. - CRDO holds a Zacks Rank of 1 (Strong Buy), while MRVL has a Zacks Rank of 3 (Hold), suggesting a more favorable outlook for CRDO at this time [23].

Core Viewpoint - Cisco Systems is expected to report strong third-quarter fiscal 2025 results, driven by improved demand in networking and security products, despite facing some macroeconomic challenges [1][3][5]. Financial Expectations - Cisco anticipates third-quarter revenues between $13.9 billion and $14.1 billion, with non-GAAP earnings expected between 90 and 92 cents per share [1]. - The Zacks Consensus Estimate for revenues is $14.05 billion, reflecting a year-over-year growth of 10.58%, while the earnings consensus is steady at 91 cents per share, indicating a growth of 3.41% year-over-year [2]. Key Growth Drivers - Improved demand for networking products, particularly in switching, enterprise routing, and industrial networking applications, is expected to benefit Cisco's results [3]. - The networking revenue estimate for the fiscal third quarter is $6.76 billion, indicating a 3.6% year-over-year growth [4]. - Cisco's security revenue is estimated at $2.195 billion, showing a significant year-over-year growth of 68.3%, driven by strong demand for solutions like XDR and Secure Access [4][5]. Market Performance - Cisco shares have gained 1% year-to-date, outperforming the Zacks Computer & Technology sector's decline of 8.5% and the Computer Networking industry's return of 0.8% [6]. - However, Cisco's stock is considered to have a stretched valuation, with a forward 12-month P/S ratio of 4.08X, higher than the industry average of 3.89X [9]. Strategic Initiatives - Cisco's investments in AI, cloud, and security are expected to drive growth, with AI infrastructure orders exceeding $700 million in the first half of fiscal 2025 [12]. - The company is leveraging AI across its portfolio, including the launch of the Renewals Agent, an AI-driven solution, and enhancing customer experience through Agentic capabilities [13]. - Cisco's security business is benefiting from strong demand for Cisco Secure Access and XDR, with both solutions gaining over 1,000 customers in the past year [14]. Partnerships and Collaborations - Cisco's partnerships with major companies like Meta Platforms, Microsoft, NVIDIA, and ServiceNow are enhancing its market position [15]. - Collaboration with NVIDIA is expanding Cisco's data center infrastructure portfolio, while the partnership with ServiceNow integrates AI-driven security solutions [16][17]. Conclusion - Cisco's near-term results are expected to benefit from a robust networking and security business, supported by a strong partner ecosystem, despite facing tariff-related and macroeconomic challenges [18].

Key Takeaways A stock market selloff was due. Now it's time to buy into weakness on AI stocks Marvell Technology, Inc. (MRVL) is a leader in data infrastructure semiconductor solutions Marvell's upbeat earnings outlook earns it a Zacks Rank #1 (Strong Buy) MRVL is trading at decade-long lows in terms of its PEG ratio even though the stock has climbed 335%A stock market selloff was due after the post-Trump election euphoria sent artificial intelligence stocks and other growth areas skyrocketing. Those mas ...