Citibank: AI revenue is expected to boost performance in the second half of the year and maintain the “buy” rating of Maywell Technology (MRVL.US)

The Zhitong Finance App learned that Citi maintained the “buy” rating of Mewell Technology (MRVL.US), with a target price of 91 US dollars, highlighting confidence in the company's increase in artificial intelligence sales targets.

Analysts led by Atif Malik pointed out that due to strong growth in custom application-specific integrated circuits (ASICs) and continued strong demand for 800G optical modules, they expect Maywell Technology's market expectations to rise in the second half of 2024. Fundamentally, they still believe that only two companies are capable of providing the technical expertise needed to design cutting-edge custom ASIC chips, and Mywell Technology is one of them.

Analysts said management is confident in short- and long-term customized ASIC opportunities for the three hyperscale customers A, B, and C, which will drive the total AI sales target for FY25/26 to reach $1.5 billion/$2.5 billion.

Analysts believe Maywell Technology is likely to see strong growth in Trainium2 chips this year, and notes that Amazon (AMZN.US) AWS CEO Matt Garman is excited about the launch of the new training chip and the expansion of AWS artificial intelligence/machine learning (AI/ML) workloads/capacity at recent meetings.

Malik and his team believe that Google's (GOOGL.US) Arm CPU production capacity increase may be small this year, but if the hyperscale company decides to expand the project to general-purpose processors, the increase could be significant next year.

Analysts said Microsoft (MSFT.US) remains the biggest opportunity in 2026, and they believe Maywell Technology is also capable of benefiting from Open AI and Oracle (ORCL.US)'s new customized ASIC projects in the future.

Maywell Technology believes that its non-artificial intelligence business of enterprise networks and operator infrastructure bottomed out after shipments fell short of terminal demand in the first half of 2024, and the company expects a recovery in the second half of the year. However, analysts pointed out that it remains to be seen when non-artificial intelligence sales will reach normal sales levels of around $2 billion.

Due to strong growth in demand for custom ASICs and 800G optical modules, analysts expect Maywell Technology's revenue to show stronger month-on-month growth in the fourth quarter.

Overall, Citibank analysts said they rated Maywell Technology as a “buy” due to continued growth in artificial intelligence optics, tiered sales of customized ASIC artificial intelligence projects, and a bottoming rebound in non-cloud markets such as enterprise networks and operators.