Stifel Defends Marvell’s (MRVL) ASIC Leadership Amid AI Chip Market Rumors

Marvell Technology, Inc. (NASDAQ:MRVL) is one of the Hot AI Stocks on Wall Street’s Radar.On December 9, Stifel maintained its Buy rating on the stock with a $114.00 price target. Firm analysts addressed recent market rumors as baseless, reaffirming confidence in the company’s ASIC platform positioning.

Defending the company’s platform status against recent noise, the firm noted that the speculation that Marvell could lose its XPU socket to a competitor for “second and larger ASIC customer are without merit.”

“We believe news reports that Marvell could lose its XPU socket to a competitor for its second and larger ASIC customer are without merit. We also believe reports from the market landscape yesterday suggesting Marvell is not participating in its lead ASIC customer’s next generation platform are misleading.”

Citing The Information’s report that Microsoft was in talks to switch to Broadcom from Marvell for its custom chip business, the firm noted that such a move wouldn’t match typical design cycles. This is because it would take three to four years to develop the chips.

“We believe the timeline of this speculation is misaligned with this reality. Any hypothetical partner switch discussions actively occurring would not be meaningfully impactful to revenue until FY29 at the earliest.” -Analyst Tore Svanberg.

The firm also pushed back on Benchmark’s claims that Marvell is at risk of losing business to provide the design for Amazon’s Trainium 3 and 4 chips. The firm noted that even though the company may not have the exact level of content in the new-generation chips as it did in Trainium 2, the company’s guidance appeared solid anyway.