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JPMorgan analysts said in a note on Monday that they continue to be positively biased on the cloud data center market for the mid-to-long term, “which should bode well” for Marvell Technology (NASDAQ:MRVL) and Broadcom (NASDAQ:AVGO).
The analysts stated that the firm also believes NVIDIA (NASDAQ:NVDA) should “benefit from strategic spending on accelerated compute initiatives and the start of its H100 upgrade cycle.”
The analysts currently have an Overweight rating on Marvell Technology and Nvidia, while Broadcom has no rating.
“Broadcom’s well-positioned with its strong cloud switching/routing silicon (85% share) and the team is ramping its Tomahawk 4 chipset (25.6Tbps throughput) and seeing continued strong demand pull for its Tomahawk 1 and 3 families as well. For Marvell, the team owns 80%+ share in the optical module/transceiver market and should drive strong shipments of its 200G/400G PAM4 DSP chipsets and 800G PAM4 DSP chipsets to Google and NVIDIA to support accelerated compute clusters using Google’s TPU processor and NVIDIA’s A100/H100 clusters,” analysts wrote.
“Custom chip (ASIC) cloud titan programs are very strategic and numerous programs set to fire in CY23, which is positive for the two leaders in the market: AVGO and MRVL,” they added.
“Cloud/hyperscale datacenter titans continue to focus more on custom chip (ASIC) designs as differentiation, performance, power consumption, and costs become major focus areas. We believe that both Broadcom and Marvell have numerous 7nm and 5nm ASIC design wins and both companies are already starting to put in place their 3nm ASIC design infrastructure and capture early design wins.”
