My cost basis for $MRVL (Marvell Technology) is $263, and the current price is $272.
Some of you are panicking, which made me feel compelled to write this. Interestingly, I didn't get this many direct messages even when the stock dropped to $206. Anyway, let's get down to business: determining whether this stock is overpriced or not. Let's start there. #MRVL
Yes, we are looking at an earnings per share (EPS) of roughly $4.20, which means the stock is trading at a price to earnings (P/E) multiple of over 50x.
On top of that, I don't expect profit margins to expand significantly because the company's fastest-growing segment is its custom chip division. Under normal circumstances, I might agree with you and move on from this stock.
In Q2, Marvell reported $2.74 billion in total revenue, marking a 37% year over year increase. Out of this total, $2.17 billion came from the Data Center segment meaning data center revenue now accounts for roughly 79% of the company's total sales. Enterprise networking, communications, and other segments contributed $568 million.
Here is the key takeaway: If AI accelerators cannot communicate with each other fast enough or if memory bandwidth falls behind, compute power alone becomes ineffective.
You can have thousands of powerful AI chips, but if they cannot communicate rapidly with one another, you simply cannot utilize their full computing potential. Marvell focuses directly on solving this interconnect problem. Through its high-speed networking and optical solutions, it drastically improves data transfer between chips, enabling AI systems to operate far more efficiently.
Sparrow
Some of you are panicking, which made me feel compelled to write this. Interestingly, I didn't get this many direct messages even when the stock dropped to $206. Anyway, let's get down to business: determining whether this stock is overpriced or not. Let's start there. #MRVL
Yes, we are looking at an earnings per share (EPS) of roughly $4.20, which means the stock is trading at a price to earnings (P/E) multiple of over 50x.
On top of that, I don't expect profit margins to expand significantly because the company's fastest-growing segment is its custom chip division. Under normal circumstances, I might agree with you and move on from this stock.
In Q2, Marvell reported $2.74 billion in total revenue, marking a 37% year over year increase. Out of this total, $2.17 billion came from the Data Center segment meaning data center revenue now accounts for roughly 79% of the company's total sales. Enterprise networking, communications, and other segments contributed $568 million.
Here is the key takeaway: If AI accelerators cannot communicate with each other fast enough or if memory bandwidth falls behind, compute power alone becomes ineffective.
You can have thousands of powerful AI chips, but if they cannot communicate rapidly with one another, you simply cannot utilize their full computing potential. Marvell focuses directly on solving this interconnect problem. Through its high-speed networking and optical solutions, it drastically improves data transfer between chips, enabling AI systems to operate far more efficiently.
Sparrow