By Angela Palumbo
Marvell Technology stock was rising Friday after a Citi analyst named the chip maker as its No. 1 specialty semiconductor pick.
Citi analyst Atif Malik said in a research note Friday that Marvell is now his favorite specialty chip stock, while Nvidia is now No. 2. Malik maintained Buy ratings for both Marvell and Nvidia, with targets of $75 and $575 for their respective stock prices.
“We like the stock setup in 2024 on continued AI optics growth, layering of custom ASIC AI project sales, and bottoming out of non-cloud markets like enterprise networking and carrier,” Malik said of Marvell.
Marvell stock was up 2.1% to $69.65 in premarket trading Friday . Shares of Nvidia rose 1.6% to $580.10, while futures on the Nasdaq 100 were up 0.6%.
Malik’s optimism about Marvell comes even though the company posted fiscal third-quarter earnings and revenue that fell from the prior year. It said revenue for its fiscal fourth quarter is likely to be flat compared with the previous year.
“The diversification of our portfolio is serving us well, with strong growth from AI and cloud carrying us through a softening demand environment in other end markets,” Chief Executive Matt Murphy said at the time.
Analysts have been upbeat about the company’s prospects due to its exposure to artificial intelligence.
“Marvell [is] uniquely positioned in data-center AI with electro-optics, switching, storage and custom ASIC [chips],” Oppenheimer analyst Rick Schafer wrote after the earnings report. “We see sales accelerating into ’24 led by multiple new product cycles and share/content gains.”
He rated the stock at Outperform with a $70 price target.
And while Citi gets more excited about Marvell, Nvidia is now its No. 2 specialty chip stock. The stock has already gained more than 15% in 2024.
Write to Angela Palumbo at angela.palumbo@dowjones.com