Wall Street is still digesting Nvidia’s (NVDA) second quarter earnings as shares remain under pressure. But many more chip makers like Marvell Technology (MRVL) and Broadcom (AVGO) still have yet to report earnings. But could they have a chance at acquiring more market share in the AI chip market from Nvidia following its latest results?
CFRA Research senior equity analyst Angelo Zino joins Market Domination to give insight into the chip sector and how some of these chip makers may fare amidst high demand moving forward.
Zino states that when you look at Marvell’s non-AI business segments “like carrier infrastructure, the consumer side of things, those enterprise networking, those businesses have declined 50 to 70% over the last two to three quarters.”
“Our view is kind of the inventory correction is kind of really played itself out at this point in time. And you’re now looking at potential sequential improvement here in the July quarter and, more importantly, in the following 2 to 3 quarters,” Zino tells Yahoo Finance.
Broadcom is set to report its fiscal third quarter results next week on Thursday, September 5. Zino finds Broadcom’s networking business to be “the bread and butter” for their semiconductor segments.
“We think that is kind of running on all cylinders. So as far as kind of the semiconductor business, AI is driving that business very well, as well as Apple (AAPL). And then the VMware side of things, they continue to exceed our expectations on both the cost-cutting side of things, as well as kind of the revenue growth trajectory,” Zino says.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination.
This post was written by Nicholas Jacobino
Video Transcript
After the bell today, we got another name reporting in your coverage Universe Marvel.
I’m curious what you are looking for in that report, Angelo, is that a name I wanna own?
I mean that, that’s a name we’ve liked for a little while here.
We do have a strong buy recommendation on the name.
So it, it’s a name we like a lot, not necessarily for any given quarter because who knows what is gonna happen in any given quarter.
But the good thing here is, you know, finally, when you kind of look at their non A I businesses, kind of their, you know, they’re more kind of legacy type drive uh businesses in areas like, you know, carrier infrastructure, the consumer side of things.
Um those enterprise networking, those businesses have declined, you know, 50 to 70% over the last 2 to 3 quarters.
Our view with kind of the inventory correction has kind of really played itself out at this point in time and you’re now looking at potential sequential improvement here in the July quarter and more importantly in the following 2 to 3 quarters.
So, um we actually think, think they’re at a point now where they’re actually gonna start seeing sequential acceleration.
Uh because of the, the unwind, we’ve, we’ve seen essentially kind of play itself out on the legacy uh businesses and Angela, we’re also anticipating Broadcom earnings next week.
What are you looking for as far as broad time is concerned?
I mean, II, I think, you know, I, I think they continue to do very well.
I mean, this is essentially a company at this point in time on the on the semiconductor side of things really tied to kind of the both the compute side of things in terms of their custom silicon business tied to Apple, which you know, we think is, is seeing is ordering very nicely ahead of this iphone 16 cycle.
And of course, the networking business, which is kind of the bread and butter of uh their semiconductor business.
And we think that is kind of running on all cylinders.
So as far as kind of the semiconductor business A I is driving uh that business very well as well as Apple and then the VM ware side of things, they continue to exceed our expectations on both the cost cutting side of things as well as kind of the revenue growth trajectory.
And we don’t see that changing at all as far as the numbers are concerned here for the July quarter and Angelo, it’s, it’s had a heck of a run already.
It’s up more than 70% here over the over the past 12 months, Angelo, but you, you must still find valuation attractive at these levels.
I wouldn’t necessarily say valuation is attractive at this point in time.
Josh, but I will say this, um you know, we don’t think they’re egregious.
So, you know, we’re kind of more in the camp of um at least with most of these kind of a I driven names, you see some pronounced Pullbacks out there.
Those are where the buying opportunities are really to be found.
So, um I wouldn’t necessarily be chasing any of these names at this point in time, but the fundamentals still look really strong.
Um, especially for a name like Broadcom.
We’ve been kind of going into the print and going into 2025 not egregious.
We’ll take it Angela.
Thank you as always for joining the show.
Appreciate it.
All right.
Thanks for having me.