Morgan Stanley on Marvell (MRVL): ' continue to see the stock as tactically interesting near term, with the caveat that our positive checks - which persist - have not resulted in revenue upside'

Morgan Stanley analyst Joseph Moore reiterated an Equalweight rating and $90.00 price target on Marvell (NASDAQ: MRVL)

The analyst comments "Regarding the second custom silicon AI customer: Marvell's first custom silicon customer is Amazon for Trainium 2, and the second is Google for custom ARM processors (AMZN and GOOGL are covered by Brian Nowak), but the second accelerator customer is coming in 2026, which is widely understood to be Maia 2 for Microsoft (covered by Keith Weiss). Marvell said on the most recent earnings call that this program was going well, and was tracking to first revenue in calendar 2h26. A downgrade today made the case that this business has been lost and is going to AVGO. We disagree with this, and have fresh checks with industry people suggesting that this is still a Marvell design. We believe AVGO does aspire to win the business, but there is some debate as to the status of that - we have heard it much more as, when MRVL struggles with this, we will be there to pick up the pieces, rather than business already won. Our contacts have suggested this is still Marvell design, and that the switching costs are very high. Unlike Trainium where much of the design IP comes from MSFT, Maia 2 is a MRVL full front end design and shifting vendors would be a multi year endeavor. That said, we still view 2h26 revenues as a show-me situation, as there isn't a high success rate of first generation ASICs, so even with MRVL positive commentary we aren't banking on a large amount of year 1 revenue. We are EW, and continue to see the stock as tactically interesting near term, with the caveat that our positive checks - which persist - have not resulted in revenue upside, leaving us with somewhat lower conviction than peers. "

For an analyst ratings summary and ratings history on Marvell click here. For more ratings news on Marvell click here.

Shares of Marvell closed at $61.22 yesterday.

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