GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Marvell Technology's Weakness Is a Good Investment Opportunity

July 22, 2014 | About:



Marvell Technology Group (MRVL) is a worldwide pioneer in incorporated silicon solutions, giving chips to various applications such as storage and mobile. The organization has been an outstanding performer in the last one year with shares up more than half, yet there's something else entirely to come later on. Marvell is supposed to profit from the presentation of LTE in China by China Mobile, and by supplying its chips to Samsung for its smartphones.

Marvell is as of now seeing the benefits of such tailwinds and its final quarter results will testify the same. In the previous quarter, Marvell acquired revenue to $932 million and net income was $0.29 per share. The results surpassed analysts' estimates because of an outstanding performance by the organization's storage business which increased 13% as contrasted with the previous year. Marvell remains optimistic about its long haul prospects on the again of several development drivers going ahead.

Storage performing admirably

Marvell's HDD business has been performing admirably since the organization is picking up piece of the overall industry and is witnessing an increase popular from its customers, as a result of stabilization in the worldwide PC market. In addition, Marvell is seeing strong request in the enterprise segment and is picking up piece of the overall industry at a top North America-based HDD customer.

Proceeding onward, Marvell's SSD segment is also seeing fast development, with revenue from this business multiplying in fiscal 2013. The organization saw strong year-over-year development in its PCIE and SATA based products. Marvell is looking to sustain this energy, so it has as of late presented two new elite SSD products, and a lot of people progressively are in the pipeline.

In the systems administration business, Marvell's performance surpassed its own particular expectations in the previous quarter. The organization saw design wins for its distinctive product offerings such as Xelerated, Prestera and ARMADA ARM Soc. This technology offers a significant increase in performance in server farms and mobile infrastructure, which should help Marvell draw in more customers.

Short-term weakness in mobile

Marvell saw seasonal weakness in its mobile business in the final quarter as a result of item dispatch delays by specific customers. On the other hand, the organization expects mobile interest to get again on track in the continuous quarter, determined by various tailwinds.

Marvell is seeing interest for its LTE products from several customers. Marvell is focusing on the high-volume piece of the LTE showcase by giving 4g solutions to platforms in the ease segment of the business. The organization is seeing enormous open door in China as the Chinese government has issued TD-LTE licenses to each of the three mobile operators. Marvell is as of now captivated with various customers for its 4g LTE solutions in China, and it is getting strong orders from customers in this area.

Marvell should profit from China Mobile's LTE rollout, which is happening at full steam. Since China Mobile is relied upon to spend $13.41 billion before the year's over to take off LTE in the nation, Marvell should profit as more LTE phones are dispatched in the business.

Also, Marvell as of late saw a key design win as Samsung's Galaxy Win Pro Smartphone for China Mobile's system. Samsung chose to use Marvell's ARMADA Mobile Pxa1088 Quad-Core Platform for this gadget. Samsung is one of the heading smartphone sellers in China, just behind Xiaomi. In November last year, Samsung had 21% of the Chinese market. In the event that Marvell continues to extend its relationship with Samsung, it could hit gold in the locale since it is the world's biggest smartphone market.


Marvell has truly a couple of tailwinds to include upon what's to come. The organization's customers are leaders in diverse segments, putting it in an advantageous position to tap distinctive markets such as storage and mobile. Thus, investors can depend on this technology stock for impressive returns later on.

Rating: 3.0/5 (1 vote)



Please leave your comment:

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial