Marvell shares target raised by Evercore ISI on AI growth prospects By Investing.com

On Friday, Evercore ISI updated its outlook on Marvell (NASDAQ:) shares, a semiconductor company, by increasing its price target from $88.00 to $91.00 while maintaining an Outperform rating. The adjustment reflects the firm’s recognition of the company’s significant progress in the artificial intelligence (AI) sector.

Marvell has reported a year-over-year doubling of its AI revenues, estimated at $234 million. Evercore ISI projects that these revenues will continue to surge, potentially doubling again to reach $550 million by the January 2025 quarter.

This growth trajectory is attributed to Marvell’s successful penetration into the AI market, particularly with its optical components used in AI datacenters.

According to the firm, the current growth in Marvell’s AI segment is expected to shift towards custom AI processors, which are anticipated to drive the revenue increases in the current year. This is a notable change from the previous reliance on optical components as the primary source of AI revenue.

The analyst from Evercore ISI expressed a belief that Marvell’s projections for its AI revenue might be on the conservative side. This suggests that there could be potential for even greater growth than what is currently forecasted by the company.

The price target hike to $91.00 comes as Marvell continues to expand its presence in the AI industry, with a strategic focus on developing and supplying advanced processors for AI applications.

The firm’s maintained Outperform rating indicates confidence in Marvell’s ability to outperform the general stock market or its sector in the foreseeable future.

InvestingPro Insights

As Marvell (NASDAQ:MRVL) garners positive attention for its AI revenue growth, InvestingPro data offers additional context for investors considering the company’s stock. Currently, Marvell has a market capitalization of approximately $66.51 billion, underscoring its significant presence in the semiconductor industry. Despite recent challenges, with a revenue decline of nearly 7% over the last twelve months as of Q4 2024, Marvell’s price has experienced a substantial uptick, with a 38.16% return over the last six months and a 31.92% return over the past year, reflecting investor optimism.

Two InvestingPro Tips that may be of interest to investors include Marvell’s expected net income growth this year and its track record of maintaining dividend payments for 13 consecutive years, demonstrating a commitment to shareholder returns even amidst market fluctuations. Furthermore, Marvell is forecasted to be profitable this year, which could further solidify its financial position.

For those looking to delve deeper into Marvell’s financials and future outlook, InvestingPro offers a comprehensive suite of additional tips. With a total of 11 InvestingPro Tips available, investors can gain a more nuanced understanding of Marvell’s performance and potential. To access these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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