Semiconductors
Marvell Q4: Margin Expansion Yet AI Capitulation
Marvell reported in line results with Q4 revenue that grew by 27.4% YoY and 19.9% QoQ to $1.82 billion, beating estimates by 1.2%. Adjusted EPS grew by 30.4% YoY to $0.60, beating estimates by 1.6%. Management guided Q1 revenue of $1.875 billion, representing a YoY growth of 61.5% YoY and 3.2% QoQ at the midpoint, beating estimates modestly by 0.3% and expects adjusted EPS to grow 154.2% YoY to $0.61, beating estimates by 1.7%. The company’s margins have improved from negative GAAP operating margin (often double-digit negative) to 12.9% in the most recent report. The adjusted operating margin of 33.7% was flat but on higher revenue, resulting in adjusted EPS that grew 40% sequentially. Although Marvell’s quarter was not a blowout, with some readthroughs being the Amazon deal is not as strong as expected, inventory is up 20% QoQ compared to 3% QoQ revenue guide, and management stated they are in “significant volume production ahead.” Overall, I’ve seen supply taking longer this quarter, thus within the framework of what I’ve seen, Q4 reports and Q1 guides are an air pocket of sorts across the board. Ultimately, there is $300B in capex saying the air pocket will resolve in the (patient) AI investor’s favor.
Sign in to read the full article
Sign in with your I/O Fund account to check your plan access.
