One of the best semiconductor growth companies out there must be Marvell Technology, Inc. (MRVL).
Lately, performance has been clicking with revenue of 61% year over year.
And similar to the third quarter, MRVL is expecting another strong performance led by cloud customers across a broad range of products.
They expect data center revenue to more than double from a year ago, and project sequential growth in the double-digits on a percentage basis in the fourth quarter.
I am pleased with the strength of the cloud end market, which I expect will remain a strong driver of sustained growth for Marvell.
Looking out further in time, I believe there is immense potential for another phase of growth as large-scale virtual environments, such as Facebook (FB) is doing with their metaverse, start to gain traction.
In short, I expect many different implementations of virtual environments enabled by a broad set of companies and ecosystems that MRVL will be involved in.
Regardless of the form these environments take, the data sets will be exponentially larger compared to the current internet, which is largely two-dimensional, and latency will need to be extremely low to realistically simulate a real-world environment.
As a result, I expect the metaverse will significantly accelerate a number of key trends, which are already developing in the cloud today, including the need to store huge amounts of data in a secure environment, connected by high-speed electro-optic links to custom compute engines.
This next level of massive scaling makes the metaverse an even stronger candidate for cloud-optimized silicon solutions that Marvell is currently enabling.
This meshes perfectly with the core competencies MRVL has already developed across compute, storage, security, networking, high-speed electro-optics, and customization, which are driving their current success.
And these are equally applicable to the variety of virtual environments, which MRVL will develop over time.
The metaverse also has the potential to be a killer app for 5G, another area of strength for Marvell.
Multiple cloud customers have already engaged with MRVL, as they start designing the architecture of their next generation of data infrastructure to enable a significantly richer set of virtual applications and experiences.
Looking at the fourth quarter, I expect a strong ramp in MRVL’s 5G business of approximately 30% sequentially.
It's exciting to see MRVL step up in the 5G business, and I expect significant additional growth over the next several years as 5G adoption continues to grow around the globe, combined with Marvell content gains from designs.
Lastly, the future of technology in cars is all about electrification and intelligence, with embedded security and onboard storage in a fully networked environment.
Similar to the rise of optimized silicon and cloud, automotive OEMs are realizing that to differentiate their products and need unique technology and IP to be embedded in compute silicon optimized to their specific platforms.
In short, MRVL is at the intersection of growth and opportunity of every major technological innovation that carries weight.
From the metaverse, data center, and electric cars, their products are the heartbeat of how these technologies will evolve.
Buying this stock is a bet on technology accelerating which it surely will and long term, I don’t see how this stock isn’t up from today.
