8. MaxLinear, Inc. (NASDAQ:MXL)
Number of Hedge Fund Investors In Q1 2024: 18
MaxLinear, Inc. (NASDAQ:MXL) is a specialized chip company that designs and sells communications SoCs. This places the firm at the mercy of the telecommunications sector, and its status as a semiconductor stock also means that MaxLinear, Inc. (NASDAQ:MXL) is vulnerable to the cyclical trends of the chip industry. On this front, as the telecommunications sector slowed down in 2023 and vendors were left with excess inventory, MaxLinear, Inc. (NASDAQ:MXL)’s revenue dropped by 38% annually to sit at $693 million. It spent the first quarter dealing with inventory digestion as well, with revenue dropping 62% annually. However, just as NVIDIA has bounced back from its 2022 revenue slump because of AI, MaxLinear, Inc. (NASDAQ:MXL) might also find that new and emerging technologies such as WiFi-7 and a growth in fiber and other network operations allow its revenue to rebound.
MaxLinear, Inc. (NASDAQ:MXL)’s management is optimistic about these trends too as they shared details for WiFi-7 and the ever crucial copper ethernet upgrade in the US during the latest earnings call:
Customers are expected to upgrade today’s more than 2 billion copper 1-gigabit Ethernet ports to 2.5 gigabit Ethernets speeds over time using the existing standard CAT-5 cabling. We are seeing exciting design win activity for our solution, including a Tier 1 North American enterprise OEM customer that is expected to ramp to production in the late 2024. As we look ahead, we believe our Ethernet business could reach $100 million over the next 18 to 24 months. Turning to broadband. We continue to gain traction in the fiber P — PON market with new design wins driving our growth. As many of you know, in 2023, we began ramping our single-chip integrated fiber PON plus 10-gigabit processor gateway SoC and connectivity solutions with the major Tier 1 North American service providers.
We’re now ramping a new opportunity with the second major Tier 1 North American service provider. Together, these wins confirm our competitive product offering and demonstrate significant growth opportunities for us in the coming years. Last year, our PON revenue was approximately $50 million. We expect to be able to more than double that over the next 2 years. In connectivity, our Wave700 single-chip tri-band, Quad MIMO WiFi 7 device continues to do extremely well in qualifications. We expect service providers to begin the initial rollout late this year with adoption peaking in 2 to 3 years. For MaxLinear WiFi 7 has the exciting potential to drive significant ASP growth and higher attach rates in our broadband access platform versus previous generations.
