We recently published a list of Jim Cramer’s Latest Stock Portfolio: Top 10 Recommendations. Since Marvell Technology Inc. (NASDAQ:MRVL) ranks 1st on the list, it deserves a deeper look.
Jim Cramer in a latest program talked about the concept of “suitability” of stocks in investing, which emphasizes the importance of picking individual stocks based on your personal context, circumstances and life goals instead of short-term market movements. Cramer recalled his days at the Harvard Law School and how he used to run to the library to read research reports on companies to dig out information on quality stocks on a week-to-week basis. When Cramer joined Goldman Sachs, an “executive” at the firm introduced him to the concept of suitability, advising him never to recommend stocks to people without knowing what they want out of investing. According to Cramer, that “best semiconductor stock” might not be good for all individuals and therefore it’s necessary to know the “tolerance” and risk appetite of investors.
Answering a question during the program, Cramer said technical analysis, including paying attention to RSI values, is “incredibly” important to him and he does not like to buy stocks if “their chart is bad.”
For this program we watched several latest programs of Jim Cramer and picked 10 stocks he talked about recently. These include stocks he’s bullish on as well as the ones he recommends selling. We have analyzed each stock in detail to see its fundamentals and know what the Wall Street believes about it. We have also mentioned hedge fund sentiment with each company. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Marvell Technology Inc (NASDAQ:MRVL)
Number of Hedge Fund Investors: 87
Answering a question about Marvell in a latest program, Cramer said that Matt Murphey (MRVL CEO) has a “division that’s unbelievable and the other one that’s not.” Cramer thinks the “unbelievable” division of Marvell “continues to get” better and the latter is showing improvement.
“Therefore you should hold on to it.”
JPMorgan believes MRVL could “dominate” the custom application-specific integrated circuit, or ASIC, market. Analysts at JPMorgan estimate that Marvell Technology Inc (NASDAQ:MRVL) could generate between $1.6 billion and $1.8 billion in AI revenue from ASICs and networking this year and between $2.8 billion and $3 billion next year.
Marvell Technology Inc (NASDAQ:MRVL) shares recently tumbled following mixed Q1 results. However, some analysts believe the stock could be an opportunity to buy on the dip. Oppenheimer analyst Rick Schafer maintained his outperform rating on the stock and upped his price target to $90 from $80.
Analysts believe that Marvell Technology Inc. (NASDAQ:MRVL) could be the next major AI play as Marvell Technology Inc. (NASDAQ:MRVL) begins to roll out AI-specific products like Spica™ 800G PAM4 DSP platform for optical interconnects. Marvell Technology Inc. (NASDAQ:MRVL) also sells Application-specific integrated circuits (ASICs) for data centers, which are seeing a huge boost amid the AI revolution.
According to data compiled by Yahoo Finance, average Wall Street price target for Marvell Technology Inc. (NASDAQ:MRVL) is $87.7, which represents a 14% upside potential from the current levels.
However, Marvell Technology Inc’s (NASDAQ:MRVL) negative revenue growth has alarmed many especially when peers are growing at a faster pace. In the first quarter, revenue fell 12.2% on a YoY basis. Marvell Technology Inc (NASDAQ:MRVL) has a $3 billion of net debt. In fiscal 2025, Marvell Technology Inc’s (NASDAQ:MRVL) FCF is expected to come in at $1 billion, excluding taxes and management’s stock options. While the stock’s PE ratio (TTM) is 52, it’s trading at 32X 2025 EPS estimate. This makes Marvell Technology Inc. (NASDAQ:MRVL) a stock to consider only for the long-term. In the short-term there are much better options to invest in the AI space other than Marvell Technology Inc. (NASDAQ:MRVL).
Overall, Marvell Technology Inc. (NASDAQ:MRVL) ranks 1st on Insider Monkey’s list titled Jim Cramer’s Latest Stock Portfolio: Top 10 Recommendations. While we acknowledge the potential of Marvell Technology Inc. (NASDAQ:MRVL), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Marvell Technology Inc. (NASDAQ:MRVL) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
