Marvell’s Short-Term Supply Hiccups Don’t Worry Us, and Shares Look Undervalued

We maintain our $62 fair value estimate for no-moat Marvell Technology after it reported fiscal second-quarter results in line with our expectations. Marvell once more enjoyed high-flying top-line growth and margin expansion as it benefits from secular trends toward the cloud and 5G. We credit the firm for battling through ongoing supply constraints and continue to see a long runway of profitable and rapid growth for Marvell’s comprehensive data infrastructure portfolio. Shares dipped as much as 4% after hours, likely because of weaker forward-looking supply commentary in Marvell’s data center market. We view tight supply slowing revenue growth as a short-term phenomenon, and are bullish on Marvell’s long-term demand. We view shares as undervalued.