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Marvell Technology Stock Gets Nod From Credit Suisse Ahead of Earnings

Marvell Technology 'remains one of the most strategic assets' in semiconductors, Credit Suisse says.
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Marvell Technology  (MRVL) - Get Marvell Technology, Inc. Report "still represents one of the best idiosyncratic growth stories," according to a Credit Suisse analyst, who reiterated his outperform rating and $70 price target on shares of the chipmaker one day before the company is slated to post second-quarter earnings.

Shares of the Wilmington, Del., company were up slightly on Wednesday.

"MRVL still represents one of the best idiosyncratic growth stories with duration beyond CY21 already reflected in strong 5nm design momentum across all end markets which will begin to ramp in CY22," analyst John Pitzer said in a research note.

5nm design refers to a new, improved generation of silicon semiconductor chips in terms of increased transistor density, increased speed and reduced power consumption.

Despite near-term risks such as COVID, supply bottlenecks and U.S.-China tensions, the analyst said that Marvell "remains one of the most strategic assets in Semis with a strong IP core in Compute, I/O, and Storage."

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Marvell is scheduled to report second-quarter earnings on Thursday. Analysts surveyed by FactSet expect the company to report earnings of 31 cents a share on revenue of $1.1 billion.

Pitzer said he expects earnings to be at least in-line "with an upward bias" and the third quarter to be at least in-line as well, driven by such factors as continued 5G ramps by Samsung and Nokia and its acquisition of Inphi  (IPHI) - Get Inphi Corporation Report.

Earlier this month, Marvell said it planned to acquire networking-chip startup Innovium for $1.1 billion of stock.

Pitzer described Innovium as "a leading provider of cloud-optimized switches," which will "augment MRVL’s Prestera switch family for Enterprise/Carrier."

In June, Marvell offered an upbeat forecast and topped analyst estimates as strong demand continued amid a widespread shortage of computer chips.

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