Citi cuts estimates on Nvidia, Marvell on worries over slowing data center spending
Justin Sullivan

Investment firm Citi cut its earnings estimates on Nvidia (NASDAQ:NVDA) and Marvell Technology (NASDAQ:MRVL) on Tuesday, citing worries over slowing data center sales as a result of the weakening global economy.
Analyst Atif Malik lowered his 2023 earnings per share estimates on Nvidia (NVDA) and Marvell (MRVL) by roughly 10% and 1%, respectively, noting that a weakened macro environment and advertising sales are likely to slow cloud spending to roughly 10%, compared to 15% this year. 
"While our supply chain discussions continue to indicate cloud compute demand remains 15-20% above supply at US hyperscalers, we note slowing macro and advertising sales will likely impact cloud capex growth to ~10% from 15% this year," Malik wrote in a note to clients.
The analyst also cut the target prices on Nvidia (NVDA) and Marvell (MRVL) to $210 and $71, down from $248 and $74, respectively.
Malik added that long-term demand for GPUs and customized off-load ASICs are still in the "early innings," with new product cycles from Nvidia (NVDA) and Marvell (MRVL) likely to keep performing well and should outperform cloud computing spending by a factor of three and two, respectively. 
Separately on Tuesday, investment firm Wells Fargo upgraded Marvell Technology (MRVL), pointing out that a "healthy amount of pessimism" has now been priced into the stock.