StockBeat: Marvell Soars on Wells Fargo Upgrade

Investing.com – Marvell Technology surged on Monday as Wells Fargo (NYSE:) upgraded its outlook on the chipmaker, betting that the revival in data center spending and the rollout of 5G-enabled phones would boost chip sales.

Wells Fargo (NYSE:) upgraded Marvell to outperform from market perform and raised its price target on the chipmaker’s stock to $35 from $32 a share. Marvell Technology (NASDAQ:) shares surged 6%.

With the era of 5G-enabled smartphones underway, the adoption of Marvell’s 5G chips is at a “tipping point” and will likely experience a surge in demand, underpinning sales, according to Wells Fargo analyst Gary Mobley.

“We believe Marvell should continue to experience robust 5G-basestation-related sales to Nokia (HE:) and Samsung (KS:) for the balance of 2019 and into 2020,” Mobley said.

The revival of spending in the data-center market will also be a tailwind, Mobley noted.

Spending on data-center equipment is forecast to decline 2.8% to $204 billion in 2019, driven by a decline in spending on servers amid a drop in average server selling prices, according to research firm Gartner.

Marvell’s surge was also supported by a broader move higher in chip stocks amid positive developments on the U.S.-China front.

U.S. Commerce Secretary Wilbur Ross told Bloomberg on Sunday that U.S.-based companies would be issued with licenses to sell to Chinese tech-giant Huawei “very shortly.”

U.S. semi suppliers like Micron Technology (NASDAQ:) that count Huawei as an important customer were higher. The was up 1.9%, taking its gains for the year so far to 49%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.