TSP Weekly Tech Stock Update—March 9, 2024
This Week: CrowdStrike delivers strong results, Marvell disappoints, NTNX hits new record high, HashiCorp/GitLab/MongoDB earnings reviews, JP Morgan defends GOOGL, Citi remains bullish on SNOW & more.
Hello from Rob…
—Shares of Marvell Technology (MRVL, $75.42) on Friday fell 11% even though the chipmaker reported that FQ4 (Jan.) datacenter revenue rose 38% sequentially (above the forecast of mid-30% sequential growth) and advanced 54% year over year to a record $765 million (53% of total revenue), beating the consensus estimate of $759.8 million. In the previous quarter, the datacenter unit rose 21% sequentially to $556 million.
The stock sold off because Marvell said it sees FQ1 (April) total revenue of $1.15 (plus or minus 5%), 16% below the consensus of $1.37 billion. In FQ1, datacenter revenue growth is expected to be in the low single digits sequentially, powered by AI and standard cloud datacenters. The company sees a higher-than-seasonal sequential decline in revenue from enterprise on-premises datacenters.
Heading into the FQ4 report, Marvell shares had reached a new 52-week high of $85.76. Following the report, the stock is still up 25% YTD.
Despite the weaker-than-expected FQ1 revenue outlook, most Wall Street firms raised their Marvell price targets because of the company’s growing AI opportunity. There are now many bullish targets at or above the $90 level.
BofA boosted its target to $95 from $80 based on continued strong growth in the datacenter business. The firm thinks AI revenue can reach nearly 30% of FY’25 (Jan.) total revenue versus 10%+ in FY’24. JP Morgan took its target up to $90 from $70, as it believes the April quarter represents a cyclical trough for total revenue. Goldman Sachs agreed this should be the final cut, lifting its target to $84 from $74. Stifel upped its target to $86 from $72, saying it thinks AI-related revenue could be tracking to around $1.4 billion in FY’25, 75% above previous expectations of $800 million.
*Inside This Issue: A Diversified AI Chipmaker In The Spotlight
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