Marvell Technology Inc

Marvell Technology, Inc., (NASDAQ: MRVL) through its subsidiaries, is a supplier of data infrastructure semiconductor solutions. The Company is engaged in the design, development, and sale of integrated circuits. Its product solutions serve five end markets, such as data centre,     enterprise networking, carrier infrastructure, consumer, and automotive/industrial. The Company’s product offerings include custom application-specific integrated circuits (ASICs), electro-optics, Ethernet solutions, fibre channel adapters, processors, and storage controllers.

Recent Business and Financial Updates

• Q1 Fiscal Year 2025 Performance Highlights: Marvell reported net revenue of USD 1.161 billion for Q1 fiscal year 2025, slightly exceeding the mid-point of the company's guidance provided earlier. The company's GAAP net loss for the quarter was USD (215.6) million, translating to USD (0.25) per diluted share. However, on a non-GAAP basis, Marvell achieved a net income of USD 206.7 million, or USD 0.24 per diluted share. Cash flow from operations totaled USD 324.5 million for the quarter.
• Business Insights: Matt Murphy, Chairman and CEO of Marvell, emphasized the company's strong performance driven by robust demand in AI and significant growth in data center revenue, which surged by 87% year-over-year. Murphy highlighted the commencement of a ramp-up in custom AI programs alongside substantial electro-optics revenue.
• Guidance: Looking ahead to the second quarter of fiscal 2025, Marvell anticipates an 8% sequential increase in revenue at the mid-point, driven by accelerating adoption of custom AI silicon. The company forecasts a GAAP gross margin of approximately 46.2% and a non-GAAP gross margin of approximately 62.0%. GAAP operating expenses are expected to be around USD 688 million, while non-GAAP operating expenses are projected at approximately USD 455 million. Marvell anticipates basic weighted-average shares outstanding of 867 million and diluted weighted-average shares outstanding of 877 million. GAAP diluted loss per share is expected to range from USD (0.20) to USD (0.15) per share, whereas non-GAAP diluted income per share is forecasted to range from USD 0.24 to USD 0.34 per share.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 40.66, downward trending with current price near oversold levels, with expectations of a consolidation or a downward momentum till next major support levels of around USD 50. Additionally, the stock's current positioning is between both the 50-period SMA and 200-period EMA, which may serve as dynamic short to medium-term resistance and support levels respectively.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Marvell Technology, Inc., (NASDAQ: MRVL) at the current market price of USD 67.46 as of July 18, 2024, 08:10 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is July 18, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.