By Dhirendra Tripathi
Investing.com – Marvell Technology (NASDAQ:MRVL) stock jumped 0.4% Friday after the chipmaker projected another quarter of strong sales, pinning its hopes on its traditionally strong segments while new “growth pillars” emerge.
Net revenue in the fourth quarter ended January 29 climbed 68% to $1.34 billion on strong contributions from cloud, 5G, and auto segments which together represented 40% of total revenue. The company is also expecting strong growth from the enterprise networking end market as more corporates embrace a flexible, hybrid model. Quarterly revenue in the segment jumped 64%.
Marvell designs and makes chips that go into data centers and vehicles. It also gives designs to companies like Taiwan Semiconductor (NYSE:TSM) for making chips.
The company expects its current quarter revenue to be $1.42 billion with a variation of plus/minus 3%. Adjusted gross margin is seen at 65-66%.
Adjusted profit per share in the fourth quarter was 50 cents.
The gains in the stock came in even as several brokerages cut their price target after the fourth quarter results announcement.
Summit Insights analyst Kinngai Chan downgraded the chipmaker’s shares to ‘hold’ on expectations industry demand will normalize in the second half of the year, according to StreetInsider.
“While our checks also indicate Marvell’s new design wins will carry a higher ASP as well as a higher gross margin compared to its existing designs, we think most of the upside is now priced-in,” Chan said in a client note. ASP refers to average selling price.
The lowest price target came in from Wells Fargo (NYSE:WFC), which sees the stock at $70 against its previous peg of $80.
Among the brokerages cutting the targets were Goldman Sachs (NYSE:GS), Deutsche Bank (DE:DBKGn), UBS (NYSE:UBS), Rosenblatt, B. Riley (NASDAQ:RILY) and Morgan Stanley (NYSE:MS).