Marvell Technology, Inc. (MRVL.US) financial report coming out this week! JP Morgan sings praises: AI ASIC business remains strong, reaffirms "overweight" rating.

Marvell Technology, Inc. (MRVL.US) will announce its latest quarterly performance after the US stock market closes on Thursday. J.P. Morgan released a research report, forecasting strong demand for its optical DSP solution (1.6T/800G), continued strong growth momentum for its leading custom AI ASIC project (Trainium 2), and a strong growth trend in its storage business (cloud HDD/SSD controllers). J.P. Morgan reiterated its "overweight" rating on Marvell Technology, Inc. with a target price of $130. Overall, J.P. Morgan expects Marvell Technology, Inc.'s January quarter performance and April quarter guidance to be in line with or slightly higher than market expectations, mainly driven by robust growth in the data center business and continued gradual improvement in non-AI cyclical businesses. Management emphasized in a discussion at CES in January that short-term orders are "hot," with backlog orders and revenue visibility continuing to expand. Following this, the four major U.S. cloud/hyperscale cloud service providers have raised their expectations for capital expenditure growth in the next year. It is estimated that by 2026, total capital expenditure will reach $645 billion (a year-on-year increase of 56%). The strong consumer environment has received further validation from better-than-expected performances and guidance upgrades from the artificial intelligence semiconductor supply chain (such as Macom (MTSI.US), Astera Labs (ALAB.US), and NVIDIA Corporation (NVDA.US)), and J.P. Morgan expects Marvell Technology, Inc. to also benefit from similar trends. In terms of custom ASICs, it is expected that AI custom revenue for the fiscal year 2026 will reach approximately $1.8 billion (a year-on-year increase of 20%), doubling to $3.6 billion in fiscal year 2027. The capacity ramp-up of the Trainium 2 ASIC will remain robust in the first half of this year, with the next-generation Trainium 3 XPU ASIC project planned to start ramping up in the middle of the year and achieve mass production in the second half of the year. The team has already secured purchase orders for the fiscal year 2026, and J.P. Morgan expects this project to achieve $2 billion in annualized revenue in the second half of the year. Marvell Technology, Inc.'s Microsoft Corporation AI ASIC MAIA 3nm project is also set to ramp up in the second half of fiscal year 2026 and fiscal year 2027 as planned. J.P. Morgan believes that the next generation 2nm ASIC projects (AWS's Trainium 4 and Microsoft Corporation's Maia 2nm) are progressing as planned and will achieve mass production in fiscal years 2027/2028. Overall, J.P. Morgan expects that driven by strong AI infrastructure construction and customer-specific project mass production, the company will achieve robust performance in fiscal year 2026. J.P. Morgan is updating its forecast for fiscal year 2028, reflecting the completion of the Celestial AI and XConn acquisitions, which further enhance Marvell Technology, Inc.'s scale network capabilities and enable the company to be compatible with various Network-1 Technologies, Inc., thus solidifying its strong network product portfolio. With Marvell Technology, Inc.'s successful bidding for its AI XPU/ASIC and market leadership in the fiber optic and copper cable connection fields, benefiting from the trend of AI infrastructure spending, the firm remains bullish on Marvell Technology, Inc.