Nvidia, Marvell will give investors further insights into cloud, data center strength: MS
Justin Sullivan

Nvidia (NASDAQ:NVDA) and Marvell Technology (NASDAQ:MRVL) will both report quarterly results this week and while Nvidia (NVDA) already preannounced results, Morgan Stanley said the outlook from both companies on cloud and data center spending will be key for investors.
Analyst Joseph Moore, who has an equal weight rating and respective price targets of $182 and $62 on Nvidia (NVDA) and Marvell (MRVL) noted that both companies could see pockets of weakness -- gaming for Nvidia and storage and enterprise for Marvell -- but the cloud and data centers are key.
Moore noted that while Nvidia's (NVDA) preannouncement showed weakness in the data center, it's likely this was an "aberration" and the long-term trajectory is still there. The analyst added that checks show that supply issues at Mellanox have improved and demand "remains good."
"While numbers have materially less downside, the stock has simultaneously appreciated," Moore wrote in a note to clients. "We are constructive, but a weakening semiconductor market could give a better entry point; we would leave room to add to positions on weakness and would remain with an [equal weight] view."
Nvidia (NVDA) is slated to report quarterly results on August 24.
For Marvell (MRVL), which reports on August 25, Moore said it's likely there will be a "mixed" outlook, citing a few headwinds.
"We expect generally good numbers here, given lead times that have come down at the margin but are still long," the analyst explained, adding that areas to watch include storage, enterprise networking and potentially some inventory reduction in the cloud. 
Marvell's (MRVL) storage business has clearly taken a down turn, as hard disk drive demand has shown weakness, as have portions of the solid state drive market. Moore noted that when Cisco (CSCO) reported last week, it said demand conditions for enterprise networking were "okay" and shortages were easing and while that did not result in an "imminent" inventory drawdown, that day is coming.
On the other hand, Marvell's (MRVL) cloud business is expected to remain healthy and despite the fact there is some "belt tightening" happening at consumer-centric cloud operations, the expectation is they will continue to need more capacity, ultimately benefiting Marvell (MRVL).
Ahead of earnings, Wells Fargo said last week that it's possible Marvell Technology's (MRVL) backlog may have peaked, adding that the company is "not immune" from macro challenges.