Marvell: Great Long-Term Secular Drivers, But Sentiment Is A Threat

This has been a challenging year for Marvell (NASDAQ:MRVL). As fears have grown about a big reset for growth semiconductor stocks in 2023, Marvell shares have lagged the SOX index this year, falling more than 50% year-to-date and underperforming about 10%, and trading down more than 15% since my last update.

I find Marvell shares a little more challenging to evaluate now. I love the company’s long-term leverage to growth opportunities in the data center, particularly as hyperscalers move to 400G and 800G in the coming years, and I also like the exposure to 5G and enterprise networking. What I don’t like as much is the valuation and the level of expectations heading into this next quarter, as sell-side estimates for FY’24 revenue range from $6.3B to $7.8B and this is still a consensus “buy” call.

I do think Marvell is a high-quality growth name, and I think paying up for growth is fine, but I also see more risk than upside to sell-side estimates coming out of the next quarter, and I’d rather risk missing out than buying in ahead of that potential reset.

 

Keep reading this article at Seeking Alpha: 

Marvell: Great Long-Term Secular Drivers, But Sentiment Is A Threat