Buying the Dip on MRVL Post-Earnings Drop as GOOGL Partnership Develops

our 360 round. We're going to discuss Marvell. And it's time to welcome in our panel. Joining us now, Kim Forrest, founder and chief investment officer at Boca Capital Partners. And William Kerwin, the equity analyst covering this name at Morningstar. Kim, I'll go to you first here. Another example. Good strong numbers, but not enough stocks under pressure. Guess what's your takeaway and why that might be the case. Well you know, the stock really has increased mightily into this print. But as you said, it was not enough. And I think a lot of that not enough comes from the Google. Sorry, I keep calling them that alphabet announcement that they were going to have Marvell be the manufacturer of some of their chips, especially. I think everybody's thinking that more network oriented chips. So they expected more of those revenues to show up there and more importantly, to show up in the guidance. And it looks like that guidance is getting pushed out. So here we are with the stock down 8% or so I believe. And it's because not enough happened. William, you and your teams over at Morningstar do your best to kind of cut through the noise. Try not to look at the reactions too much and just get down to the numbers and come out with a thought on where this thing should be valued. Post earnings. Now, new numbers to plug into your models. What are you spitting out here? How do you how do you assess this name that is Marvell? Well, we loved the print. We loved the results, we loved the guidance. And I think that even though these Google numbers aren't yet in these guides, the guides are going up. They raise their next year guide by about 10% on the top line. And so we think this company is firing On all cylinders across data center silicon. And really, when we think about it, the next two years, we see accelerating demand for Marvell's portfolio. And we think then when you get beyond those two years, that's when the global revenues start to really ramp up and become really attractive. So we raised our valuation up to $300 a you know, the market has really loved this name this year, but we still think there's more to go. And really, in our view, the market is still undervaluing that longer term growth coming from this Google deal. Kim, I almost hate to ask you this, but I feel obligated. I still remember a time, not that long ago when Jensen Wong was on stage pointing over at this company, saying that he thought it was kind of the next big thing. Do we have to take that into serious account, given the role Nvidia has as sort of the center of this spider web? I think sure. Because, you know, they know what's out there working in data centers and they probably know what the roadmap looks like. And I mean that from a technical standpoint, not necessarily from a financial standpoint. So I think that should give shareholders that may have bought it a little higher a little relief. Now, what I think the analyst for Morningstar was talking about is you have to have a longer view here than the next 15 minutes. And you brought Invidia up, and everybody wants to own that next Nvidia and buy Nvidia. I mean, maybe the 2021 Nvidia where you know it's going to do that geometric expansion over and over again. Good luck with that. I think owning good companies that are going to provide good services and thus be in demand in the future is maybe good enough. And investors have to understand that when they're buying these names. William, as we kind of tie this up and I guess we, you know, as investors, we're making decisions and let's say that we like this sort of custom, I guess they call it Asics world, this sort of custom high end sort of end chip. Is it kind of a discussion, Broadcom or Marvell? Is that kind of the main decision point. If you were looking at this space or am I oversimplifying it. I don't know if you're oversimplifying it, but we like both right now. These are two of my top picks in the semiconductor and tech hardware space. And really XP. Use custom Asics, whatever you want to call them. We see these as an attractive secular trend within the AI trade. Even as you think about the massive growth we expect for AI infrastructure broadly, we expect share gains for these XP use against the likes of Nvidia and these generalized GPUs. We think they can grow even faster as more customers adopt these. And as a customer like Google, adopts more iterations of these chips. So for me, it's an all of the above and a yes and question where Broadcom Marvell both see an attractive growth from these. And in our view the market's still undervaluing what the long term opportunity looks like for both of them. Appreciate both of you joining me here on this Friday William Kerwin of Morningstar, as well as the chief investment officer and founder of Bokeh C