Monday - A KeyBanc analyst has adjusted the price target for Marvell (NASDAQ:MRVL) Technology Group Ltd. (NASDAQ:MRVL) shares, a leading semiconductor company, to $90 from the previous target of $95. The firm has maintained an Overweight rating on the stock despite the revision.
The adjustment comes in light of new developments that suggest a delay in Marvell's design win for the next-generation Trainium at Amazon (NASDAQ:AMZN) Web Services (AWS). The analyst anticipates that the ramp for this project is now expected to occur in 2025, as opposed to the second half of 2024. This delay is seen as a moderately negative implication for Marvell's near-term prospects.
Additionally, the analyst has provided a clarification regarding Marvell's position at AWS. The firm now believes that Marvell has secured the Trainium design win over Inferentia, which was the previous understanding.
Another factor influencing the revised price target is the introduction of Nvidia (NASDAQ:NVDA)'s new GB200 server rack design. According to the analyst, this design change will result in the GB200 server racks not requiring optical connectors within a server rack. Furthermore, there will be fewer optical connectors needed within data centers that operate GB200. This development is likely to impact Marvell's business, as the company is known for providing such connectors.
The Overweight rating, however, suggests that KeyBanc continues to view Marvell's long-term growth trajectory positively, despite these near-term challenges. The new price target of $90 reflects the firm's recalibrated expectations based on the latest industry developments and Marvell's competitive position within the market.
InvestingPro Insights
In light of the recent price target adjustment for Marvell Technology Group Ltd . (NASDAQ:MRVL), it's worth considering some real-time data and insights from InvestingPro. The company's market capitalization stands at a robust $63.03 billion, indicating its significant presence in the semiconductor industry. Despite facing near-term challenges, Marvell's commitment to dividend payments, as evidenced by 13 consecutive years of payouts, underscores its dedication to shareholder returns. This is particularly noteworthy for investors seeking steady income streams.
InvestingPro Tips reveal that analysts expect net income growth this year for Marvell, which aligns with KeyBanc's positive long-term outlook for the company. Additionally, while there has been a downward revision of earnings by 23 analysts for the upcoming period, Marvell's performance over the last year with a price total return of 85.64% cannot be overlooked. Investors may find comfort in the company's ability to navigate through industry cycles and maintain profitability, as predicted by analysts for this year.
For those looking to delve deeper into Marvell's financial health and future prospects, InvestingPro offers additional tips to guide investment decisions. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more insights. Currently, there are 11 additional InvestingPro Tips available for Marvell, which could further inform investment choices based on the latest market trends and company-specific factors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.