Marvell Technology (MRVL) cut its projection across consumer, carrier and enterprise networking businesses but even with the surprising April shortfall the company should see a material recovery, Morgan Stanley said in a note Friday.
Marvell’s PAM 4 shipments will see a flattish January due to a minor inventory adjustment, according to the note.
The company appears to be on solid ground in the cloud custom silicon business but with new Nvidia launches and supply constraints easing, further upside remains uncertain, Morgan Stanley added.
“The trajectory of custom silicon projects outside of Google has historically been disrupted by Nvidia’s rapid execution pace,” the firm said.
Morgan Stanley said weaker sectors are close to the bottom, which is evident with shipping below-end demand, and “storage has already started to snap back in data center.”
The firm said despite the downturn, signs of recovery are emerging in Marvell’s storage and automotive sectors, that suggest potential for improvement in the near future.
Morgan Stanley reduced the price target on Marvell to $71 from $84 and reiterated its equal perform rating.
The company shares were down 8.9% in recent trading.