For prominent cloud computing entities in the United States, Marvell Technology (MRVL), a chipmaker, disclosed a new initiative involving the development of specialized AI chips. Despite this announcement, there was no significant impact on the performance of Marvell’s stock.
During its “Accelerated Infrastructure for the AI Era” event in New York City, Marvell revealed the addition of a second hyperscale cloud client to its roster of AI partners. The company plans to ramp up manufacturing by 2026 to introduce an AI accelerator tailored for this undisclosed customer.
Christopher Rolland, an analyst from Susquehanna Financial Group, suggested in a client note that Microsoft (MSFT) could be the new client in question.
Analysts have indicated that Marvell is presently crafting customized artificial intelligence processors for Amazon.com (AMZN). Marvell confirmed its plans to commence the production of AI inference accelerators next year, referring to the recipient as “customer A.”
In addition to producing AI chips for Amazon, Marvell is also developing central processing units for servers utilizing Arm (ARM) technology. Marvell highlighted that the production of Arm CPUs is currently in full swing. According to JPMorgan analyst Harlan Sur, the second customer is likely to be Alphabet’s (GOOGL) Google.
Marvell Stock Records Modest Recovery
On the latest trading day, Marvell’s stock inched up by 0.2%, closing at 71.53 after experiencing a period of stagnation.
Rolland emphasized Marvell’s robust lineup of AI products for connectivity and practical applications showcased during the event. He maintains a price target of 95 for Marvell’s stock, reflecting his positive outlook.
Marvell foresees a surge in its AI revenue by fiscal 2024, projecting an increase from approximately \(200 million in the previous year to over \)550 million. Furthermore, the company revised its AI revenue forecast from \(1.5 billion for fiscal 2025 to \)2.5 billion for fiscal 2026.
After the event, Angelo Zino, a research analyst at CFRA Research, reiterated his strong buy recommendation for Marvell’s shares.
Companies Host AI-Centric Events
Marvell joins a growing list of technology firms hosting investor briefings focused on artificial intelligence. This trend follows similar events held recently by Adobe (ADBE), Broadcom (AVGO), Google, Intel (INTC), Microsoft, and Nvidia (NVDA).
In the realm of customized AI solutions such as application-specific integrated circuits (ASICs), Marvell competes directly with Broadcom. The company, headquartered in Santa Clara, California, specializes in AI system products encompassing networking, communication, and storage solutions.
Marvell is featured on the IBD Tech Leaders list.
For more updates on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X, originally Online, at @IBD_PSeitz.
