Marvell Technology (NASDAQ:MRVL) will likely present better-than-expected guidance when it releases its latest quarterly results following the recent divestiture of its Automotive Ethernet business and concern around Amazon’s (AMZN) Trainium chip, according to Morgan Stanley.
Marvell is slated to release its second quarter fiscal 2026 financial results post-market on Thursday, August 28. A consensus estimate calls for adjusted earnings per share of $0.67 on revenue of $2.01B.
Earlier this month, Marvell completed the sale of its Automotive Ethernet business to Infineon (OTCQX:IFNNY)(OTCQX:IFNNF) for $2.5B. The business was expected to contribute $225M to $250MM in revenue during fiscal 2026.
“Expect upside this quarter from optical; lowering estimates slightly post the automotive divestiture, but expect positive guidance excluding that impact,” said Morgan Stanley analysts, led by Joseph Moore, in a Monday investor note.
“AI revenue is estimated to be $876mn (+6.6% q/q) in JulQ and $955mn (+9.0% q/q) in OctQ, with faster growth coming from ASICs,” Moore added. “We see potential upside to our optical estimates from the strong AI ramp, which we view more favorably than their ASIC prospects. Outside of short-term supply issues, we believe that optical is stronger than generally perceived, and is more durable and higher margin than their ASIC business … The Trainium 3 debate may continue to be noisy, but we believe we are past the phase of inflated expectations and anticipate steady sequential ASIC revenue reaching $2bn for the year.”
In other AI stocks, Morgan Stanley believes Micron Technology (NASDAQ:MU) faces negative sentiment in the quarters ahead.
“For Micron, high bandwidth memory pricing for the current HBM 3e will have a hard reset next year with at least one customer, NVIDIA (NVDA), which had committed to full year 2025 pricing,” Moore said. “But sentiment is quite negative, and we expect HBM to retain a meaningful, albeit narrowing, premium to DDR5.”