Semiconductor giant Marvell Technology (NASDAQ:MRVL) stock dropped 4.4% in Thursday’s after-hours trading session following the release of fiscal first-quarter results. MRVL delivered earnings of $0.24 per share, which matched estimates, while revenues surpassed expectations.
The company noted that weak consumer demand and lower IT spending by enterprises impacted its performance to some extent. Nevertheless, Marvell benefited from stronger-than-expected demand for its artificial intelligence (AI) offerings.
MRVL: Q1 Highlights
The company generated Q1 revenues of $1.16 billion and surpassed Street estimates of $1.15 billion. However, it reflects a decrease of 12% from the same quarter last year. Further, MRVL’s adjusted earnings declined by 22.5% year-over-year.
During the first quarter, the company’s businesses performed weakly except for the Data Center, which provides AI-related applications. Data Center revenue rose 87% year-over-year to $816.4 million.
Meanwhile, Consumer revenue declined 70% year-over-year to $42 million. Also, Carrier Infrastructure and Enterprise Networking revenues plunged by 75% and 58%, respectively. Automotive and Industrial segment revenue was down 13%.
Fiscal Q2 Outlook
For the fiscal second quarter, Marvell expects revenue in the range of $1.19 billion to $1.31 billion. Also, adjusted earnings are expected to come in between $0.24 and $0.34. Analysts are expecting revenues and earnings of $1.22 billion and $28, respectively.
What Is the Forecast for MRVL Stock?
Overall, Marvell has a Strong Buy consensus rating based on 28 Buy and one Hold recommendations. The analysts’ average price target on MRVL stock of $89.76 implies an upside potential of 16.8% from current levels. Shares of the company have gained 45.8% in the past six months.
Importantly, MRVL sports a Smart Score of “Perfect 10” on TipRanks. It’s important to note that stocks with the “Perfect 10” score have historically surpassed the S&P 500 Index (SPX) by a significant margin.
