Until recently, NVIDIA dominated the AI chip market. But now a new star appears to have appeared in the stock market: Marvell is ahead.
• Marvell shares rise
• AI chips in high demand
• BofA recommends buying
The shares of chip manufacturer Marvell Technology rose sharply at the beginning of December. Although previous forecasts had already turned out well, they were still exceeded. Analysts say this is due to strong demand for Marvell’s custom AI chips, The Motley Fool reports. Chip manufacturer NVIDIA seems to be less able to convince investors despite its good quarterly figures. The stock has been in the red since the Q3 release. The question analysts are now asking themselves: Will Marvell overtake NVIDIA?
Optimistic forecast for the fourth quarter
According to reports from Investopedia, Marvell expects sales of around $1.8 billion for the fourth quarter of the next fiscal year. This would correspond to an impressive increase of 26 percent compared to the previous year. This puts the estimate well above Wall Street’s expectations, which is probably just $1.65 billion. According to Marvell CEO Matt Murphy, growth would be driven primarily by the company’s custom AI silicon programs, which are currently in mass production: “Our custom AI silicon programs are progressing very well, with our first two chips now in mass production. “Development for new custom programs we have already won, including projects with the new Tier 1 AI customer we announced earlier this year, is also progressing well toward key milestones,” he said in a statement Conference call.
Market and analyst reaction
After Marvell made his announcement, analysts at Bank of America (BofA) maintained their Buy rating and increased their price target to $125 from $108. Because: The chip manufacturer has “developed into a leading provider of silicon for data centers,” according to the analysts, with “growth opportunities in the areas of cloud data centers, 5G infrastructure, advanced automobiles, enterprise networks and security,” as Investopedia reports.
In fact, Marvell shares jumped 23 percent on Dec. 4, nearly doubling this year. The share most recently closed on the NASDAQ at $109.01 (closing price on December 12, 2024).
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