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Marvell Technology Group Ltd.

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Marvell’s impressive first-quarter fiscal 2019 results benefitted from surging demand for SSD drives from enterprise and data-center operators. Going ahead, Marvell’s latest deal to acquire Cavium will broaden its offerings beyond hard disk drives microprocessors and enter into high growth areas such as data centers and wireless communications. The buyout will give Marvell a direct access to the server microprocessor market, which is currently dominated by Intel. Also, we believe that the strong demand for Marvell’s 4G LTE products could be a growth driver. The stock has outperformed the industry to which it belongs to in the last one year. Nonetheless, intensifying competition in the High Definition (HD) storage drive market makes us increasingly cautious about the stock’s growth prospects.

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