Latest news with #MarvellTechnology
Yahoo
2 days ago
- Business
- Yahoo
Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Long-Term Portfolios
These companies supply critical components required in AI data centers and chips. These chipmakers are growing fast, and their remarkably cheap valuations make them worth buying right now. Both companies should keep growing at healthy rates long term, thanks to the AI-focused markets they serve. 10 stocks we like better than Micron Technology › A tried and tested way of making money in the stock market is by buying great companies that are tapping into a growing trend that also trade at attractive valuations and holding them for the long run. This strategy allows investors to benefit from secular growth opportunities and disruptive trends, as well as take advantage of the power of compounding. Artificial intelligence (AI) is turning out to be one such secular and disruptive trend that has the ability to supercharge the growth of many companies in the long run because of its ability to contribute trillions of dollars to the global economy. There are two companies benefiting big-time from the proliferation of AI. They also happen to be profitable and undervalued when we consider their impressive growth rates. They are Marvell Technology (NASDAQ: MRVL) and Micron Technology (NASDAQ: MU). Let's see why buying and holding these two names for the long run could turn out to be a smart move. AI has brought about a major turnaround in Marvell Technology's fortunes. The company, which manufactures application-specific integrated circuits (ASICs) and networking chips, finished fiscal 2025 (which ended on Feb. 1) with revenue growth of just 5% to $5.77 billion. Its generally accepted accounting principles (GAAP) net loss for the year stood at $1.02 per share. The company's tepid performance last year was the result of weakness in multiple end markets such as enterprise networking, carrier infrastructure, and consumer devices. However, the story has changed remarkably in the first quarter of fiscal 2026. Marvell's revenue for fiscal Q1 (which ended on May 3) shot up a remarkable 63% year over year to $1.89 billion. The company reported a GAAP net income of $0.20 per share as compared to a loss of $0.25 per share in the year-ago period. AI played a central role in driving this terrific turnaround as the demand for Marvell's custom AI processors increased dramatically, leading to a 76% year-over-year increase in its data center revenue to $1.44 billion. CEO Matt Murphy remarked on Marvell's May earnings conference call, "These strong results, along with our second-quarter guidance, are being driven by the rapid scaling of our custom AI silicon programs to high-volume production, along with robust shipments of our electro-optics products for AI and cloud applications." Importantly, Marvell expects its robust data center momentum to continue in the current and the next fiscal year, as well as in the long run. The company points out that it is deeply engaged with its AI customers for developing custom chips, and the good part is that they are working with Marvell to develop the next generation of custom AI processors as well. This explains why the company is confident it can sustain its AI-powered growth in the long run. Moreover, Marvell's focus on pushing the envelope on the product development front is expected to help it land a bigger share of the fast-growing custom AI processor market. The company pointed out last year that its AI-focused addressable market could grow to $75 billion in 2028 from $21 billion in 2023. It controlled 10% of this market at the end of 2023, according to its own estimates. However, third-party estimates suggest that Marvell's share of custom AI chips increased to 15% last year. Looking ahead, the company is aiming to capture more than 20% of this market. That could bring its AI revenue to more than $7.5 billion in the next three fiscal years (based on the $75 billion end-market estimate), which would be a major improvement over its fiscal 2025 AI revenue of over $1.5 billion. So, AI is set to move the needle in a big way for Marvell Technology going forward, allowing it to maintain healthy earnings growth levels. Marvell stock trades at just 22 times earnings right now. It makes sense to buy this semiconductor stock hand over fist since it is available at a solid discount to the tech-laden Nasdaq-100 index's earnings multiple of 31. The long-term opportunity in the custom AI chip market could help the chipmaker maintain elevated growth levels for a long time to come. Micron Technology made its name by supplying compute and storage memory chips that are used in computers and smartphones. The company got a serious boost recently from the deployment of some of its products in AI data centers. The high-bandwidth memory (HBM) manufactured by Micron plays a key role in AI accelerators such as graphics processing units (GPUs) and custom processors as it can transfer data at high speeds while keeping power consumption in check when compared to traditional memory. HBM ensures that a lot of data can be transferred quickly at low latency so that AI workloads can run smoothly. Not surprisingly, the size of the HBM that's being packed by AI chip designers into their accelerators is increasing. AMD, for instance, has increased the HBM capacity of its latest MI350 series of AI accelerators to 288 gigabytes (GB) from 256 GB on the previous MI325 series processors. The company plans to equip its next generation of MI400 accelerators with a whopping 432 GB of HBM next year. Even custom AI chip manufacturers such as Marvell and Broadcom are equipping their chips with HBM to speed up AI workloads and improve power efficiency. Not surprisingly, the HBM market's revenue is expected to soar to $86 billion in 2030 from just $1.8 billion in 2023, clocking a compound annual growth rate (CAGR) of 68%. Meanwhile, the adoption of AI in the smartphone and PC markets is going to be another tailwind for Micron, driving both volume and unit growth for the company. That's because AI-capable smartphones and PCs are equipped with more compute and storage memories, which should expand Micron's addressable market at a nice pace in the future. The good part is that the AI-driven growth of the memory market has already supercharged Micron's growth. Its revenue in the first six months of the current fiscal year has increased by 59% from the year-ago period. Moreover, Micron has swung to a GAAP profit of $3.08 per share in the first half of the fiscal year from a loss of $0.40 per share in the year-ago period. Consensus estimates expect Micron to deliver an impressive 439% jump in adjusted earnings this year to $7 per share, followed by a 58% increase next year. Micron stock trades at just 11 times forward earnings right now. So, buying this AI stock looks like a no-brainer as the bright prospects of the memory market could help it sustain healthy earnings growth levels in the long run as well, paving the way for more upside. Before you buy stock in Micron Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Micron Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. The Motley Fool recommends Broadcom and Marvell Technology. The Motley Fool has a disclosure policy. Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Long-Term Portfolios was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Unusual Call Options Activity in Marvell Technology Highlights the Value of MRVL Stock
Today, Marvell Technology, Inc. (MRVL) is having heavy, unusual call options volume (out-of-the-money calls) after reporting strong earnings results yesterday for its fiscal Q1 ending May 3. This highlights the value of the system-on-a-chip semiconductor designer and MRVL stock. MRVL stock is at $75.08, up over 7% in morning trading. However, the stock is still well off its highs from earlier in the year. It could have significantly more upside, as will be seen in this article. How to Use Barchart's Tools to Create My Favorite Low-Risk, High-Reward Options Trades 2 Option Ideas to Consider this Wednesday for Bearish Traders Unusual Call Options Activity in Marvell Technology Highlights the Value of MRVL Stock Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Marvell reported +63% revenue growth Y/Y, propelled by strong data center-related growth for its cloud and AI server products. Moreover, revenue rose to almost $1.9 billion, up by +4.27% from the prior quarter. This led to very high free cash flow (FCF), despite higher capex spending. For example, operating cash flow (OCF) was $332.9 million, up +2.6% over last year's $324.5 million FCF. After deducting $118.8 million, FCF came in at $214.1 million. That represents 11.2% of its $1.895 billion revenue for the quarter, a very strong FCF margin. On an adjusted FCF basis (including asset sales, etc.), FCF came in at $238.8 million, or 12.6% of sales. That was 7.1% higher than last year's $223 million adj. FCF. This was despite significantly higher capex spending this quarter (i.e., $119m vs. $91.5m last year, or +30%). As a result, we can project higher FCF going forward. For example, analysts project revenue this year of $8.25 billion (+43%) and $9.78 billion next year, using 37 analysts' estimates. This implies a next 12-month (NTM) run rate of $9.015 billion. As a result, we can project FCF using the company's most recent higher FCF margin: $9 billion x 12.6% FCF margin = $1.134 billion FCF That is much higher than a simple 4x projection using the Q1 FCF. For example, $238.8m Q1 FCF x 4 = $955.2 million FCF $1,134m FCF / $955.2m = 1.187 = n+18.7% Therefore, MRVL stock could end up with an 18.7% higher market value over the next 12 months. Let's test that. For example, right now, MRVL has a market cap of $64.55 billion. That represents 67.6x the run rate projection of $955m. Another way to say this is that the stock has a 1.50% FCF yield (i.e., the reciprocal of 67.6x). This means that its NTM market cap could be significantly higher: $1.134b NTM FCF / 0.015 = $75.6 billion That is 17.1% higher than today's market value of $64.55 billion. In other words, MRVL stock is worth $87.92 per share: $75.08 p/sh x 1.171 = $87.92 per share So, no wonder investors are buying calls today (and, alternatively, selling out-of-the-money calls). This can be seen in Barchart's Unusual Stock Options Activity Report. It shows that for the period ending June 20, over 7,000 call option contracts have traded at the $79.00 strike price. That is higher than the trading price and implies that buyers feel the stock will rise over the next two days. Alternatively, it also shows that holders of MRVL stock are willing to sell their shares at $79.00 and receive a bid-side premium of 70 cents. That represents a covered call yield of 93 basis points (i.e., $0.70/$75.36 = 0.0093 = 0.93%). In any case, this shows that investors are bullish on MRVL stock. By the way, analysts agree that MRVL stock looks undervalued. For example, Yahoo! Finance reports that 41 analysts have an average price target of $89.24 per share. Similarly, Barchart's mean survey is $91.31. These are close to my FCF margin and FCF-yield-based price target of $87.31 per share (see above). In fact, which tracks recent sell-side analysts' price recommendations, shows that 29 analysts have an average target price of $90.61 per share. The bottom line is that either from a FCF analysis basis or using analysts' price targets, MRVL stock looks deeply undervalued. So, no wonder investors are trading out-of-the-money MRVL call options in heavy volume. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
CMS Energy Stock: Is CMS Outperforming the Utilities Sector?
With a market cap of $20.6 billion, CMS Energy Corporation (CMS) is an energy company operating primarily in Michigan. Based in Jackson, Michigan, the company operates through three segments: Electric Utility, Gas Utility, and NorthStar Clean Energy. Companies worth $10 billion or more are generally labeled as 'large-cap' stocks, and CMS Energy fits this description perfectly. The company focuses on clean energy transition, investing in renewable energy sources and grid modernization to support a more sustainable and resilient energy future. OpenAI CEO Sam Altman Says 'We Are Heading Towards a World Where AI Will Just Have Unbelievable Context on Your Life' Archer Aviation Is Betting Big on Its Fledgling Defense Business. Does That Make ACHR Stock a Buy Here? Unusual Call Options Activity in Marvell Technology Highlights the Value of MRVL Stock Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. Sign Up Now! Shares of CMS Energy have dipped 10% from its 52-week high of $76.45. CMS stock has declined 6.4% over the past three months, underperforming the Utilities Select Sector SPDR Fund's (XLU) 2.4% increase. In the longer term, CMS Energy's stock has gained 3.2% on a YTD basis, lagging behind XLU's 6.4% uptick. However, over the past 52 weeks, shares of CMS have soared 16.7%, slightly outperforming XLU's 16.4% return. The stock has been trading below its 50-day moving averages since early May. CMS Energy stock rose marginally following the release of its Q1 2025 results on Apr. 24. The uptick was driven by strong operating revenue of $2.5 billion, up 12.5% year over year, surpassing Wall Street expectations. However, adjusted EPS increased 5.2% to $1.02 but came in slightly below analysts' estimates. Looking ahead, the company reaffirmed its fiscal 2025 guidance, expecting adjusted EPS to range between $3.54 and $3.60, aligning with Wall Street forecasts. Compared to its rival, Consolidated Edison, Inc. (ED) has underperformed CMS stock over the past 52 weeks, gaining 11.4%. Although shares of ED have risen 12.9% on a YTD basis, outpacing CMS stock. While CMS has outperformed over the past year, analysts are cautiously optimistic about its stock's prospects. CMS has a consensus rating of 'Moderate Buy' from the 17 analysts covering the stock, and as of writing, it is trading below the mean price target of $77.25. On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
4 days ago
- Business
- Bloomberg
Stock Movers: Circle, Marvell, Netflix
On this episode of Stock Movers: - Stablecoin issuer Circle (CRCL) shares rose as much as 9.8% on Wednesday after the US Senate passed stablecoin legislation setting up regulatory rules for crypto currencies pegged to the dollar. The stablecoin vote is the industry's most tangible return yet on the hundreds of millions of dollars it poured into electing a crypto-friendly Congress. As of the last close, the stock has risen more than 380% from its IPO price of $31. Visa (V) and Mastercard (MA) both fell as much as 5% amid continued worries about the impact of stablecoins on the credit-card issuers. - Marvell Technology (MRVL) also rallied today. Analysts are now positive on the chip maker after first quarter earnings that came in line with expectations. Following an event focused on AI, Marvell raised its overall data center total addressable market to $94 billion by 2028, up from $75 billion. - Netflix (NFLX) is up 38% year-to-date today after an announcement that the streamer will add live television channels and shows from French broadcaster TF1, expanding Netflix's live offerings for customers in the country. French customers will be be able to watch live feeds, including sports, from TF1's channels, and stream the broadcaster's shows on demand from next summer, Netflix said in a statement on Wednesday. Netflix will dedicate a portion of the app to TF1 content as part of the distribution agreement. Netflix is expanding the content it offers customers and has invested in live events such as National Football League games and wrestling matches. The French partnership goes a step further, offering traditional live broadcast content such as dramas and reality television.
Miami Herald
4 days ago
- Business
- Miami Herald
Wall Street rallies behind Marvell Stock after blockbuster AI showcase
After a topsy-turvy start to the year, AI stocks just got a fresh power-up, courtesy of Marvell Technology's (MRVL) custom chip party. Yesterday's "Custom AI Investor Day" brought a ton of action, and potentially an antidote for an industry limping into midyear. Don't miss the move: Subscribe to TheStreet's free daily newsletter After over two years of bombastic gains, the AI rally cooled off this year, shifting to a show-me story amid U.S.–China tensions and high interest rates. Nevertheless, AI isn't staying down for long-but who would've guessed Marvell would lead its next leg higher. Marvell's AI Investor Day event yesterday was a resounding success on multiple levels. It's booming custom application-specific integrated circuit, or ASIC, chips, deep cloud wins, and next-gen memory tech stamps its authority as a serious AI infrastructure play. Related: OpenAI's Altman slams Mark Zuckerberg, ignites drama Before diving into the specifics, though, it's important to understand Marvell's role in the AI landscape. Unlike Nvidia, which leads with AI GPUs, Marvell has carved out a niche as the behind-the-scenes partner powering custom chips and cloud infrastructure for the hyperscalers. Simply put, it essentially provides the critical plumbing and tailored silicon pieces that hyperscalers need to run AI at scale. That involves stuff like high-speed networking, specialized memory technologies, and custom accelerators/ASICs. Take Amazon's Trainium chips, for instance. Marvell uses its chip design skills, multi-die packaging, and advanced IP integration to bring a custom AI processor to market. Hyperscalers want custom ASICs, but few have the full in-house firepower to create them. That's where Marvell steps in with its deep IP portfolio and a full-stack platform for data infrastructure chips. Marvell's transformation, to say the least, has been nothing short of spectacular. Just a couple of years ago, we had it talking up storage, 5G, and enterprise. Today, it's AI and cloud all the way. Data center is its biggest growth driver, and Marvell's transformation into an AI-first company has been hard to miss. Now, back to the headline-grabbing event and Wall Street pundits lavishing over it. To kick things off, Marvell's booming custom-ASIC business stole a lot of the spotlight. Custom AI chips brought in a staggering $650 million in fiscal 2025 (11% of total sales). That accounted for over a quarter of data center chip sales, with that share expected to hit 50%-a multi-billion-dollar growth engine in the making. Next, we have Marvell's big leap in memory technology. A 2nm custom SRAM packing 6 gigabits at an industry-leading bandwidth, slashing standby power while shrinking die size, making AI chips leaner and faster. As hyperscalers continue to scale up, this kind of custom memory is the push they need. Perhaps the biggest flex for Marvell at the event was its major hyperscaler wins. It revealed 18 socket wins across hyperscalers, including the likes of Microsoft, Amazon, Meta, and Google. Twelve are already in production, with more expected to ramp up through 2026–27. Moreover, Marvell continues powering next-gen AI hardware for Amazon's Trainium chips and Microsoft's Maia accelerator. More On AI: Nvidia CEO sends blunt 7-word message on quantum computingSticking With This Marvell Price Target as We Look to Lock in Big GainsVeteran analyst who predicted quantum computing stocks rally unveils IonQ stock price target To top it all off, Marvell's leadership discussed the immense potential of its data center semiconductor business. They expect the total addressable market to rise from roughly $21 billion last year to $75 billion by 2028 (a 29% CAGR). Those estimates may seem lofty, but they feel a lot more palatable when backed by third-party projections. For instance, Grand View Research estimates the global AI market could grow at a 36.6% CAGR from 2023, reaching $1.8 trillion by 2030. Similarly, PwC estimates AI could potentially add $15.7 trillion to the global economy by the end of the current decade. Following the event, Marvell is drawing praise from all sides. TheStreet Pro Portfolio's lead portfolio manager, Chris Versace, is sticking with his $115 price tag on Marvell (which has over a 50% upside from current levels). Related: Tesla claims rival startup is built on stolen trade secrets Versace has stayed persistent with Marvell-buying the dips instead of bailing out. He feels that even though margins might get squeezed early, the real profit will come once custom chips scale. Though less upbeat, Bank of America's Vivek Arya raised his price target on Marvell to $90, up from $80. He feels the company's earnings power hitting $8 a share, 60% above Wall Street analysts' consensus. Morgan Stanley doubled down on its lofty price target of $133, while Deutsche Bank called Marvell "one of the few players" tailor-made for the booming custom silicon market. Deutsche's price target? A relatively conservative $85. Following the event, Marvell stock is up 7.5% to $75.36 at the time of writing. The past six months have been rough, but Marvell Technology's stock has surged 17% in the past month. Its current stock price is roughly 41% below its 52-week high of $127.48. It's worth mentioning that Marvell stock is trading at 36x non-GAAP earnings-approximately 19% below its 5-year average. Also, its price-to-sales ratio sits at 9.3x, trailing the 5-year norm by 11%. Related: Google plans major AI shift after Meta's surprising $14 billion move The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
