Is Marvell Technology, Inc. (MRVL) The Worst 5G Stock to Buy According to Short Sellers?
We recently published a list of 10 Worst 5G Stocks To Buy According to Short Sellers. In this article, we are going to take a look at where Marvell Technology, Inc. (NASDAQ:MRVL) stands against other worst 5G stocks to buy according to short sellers.
As we move a quarter of the way into the 21st century, the world is paving the way for new technologies to make human lives easier and more advanced. Out of those, 5G and artificial intelligence (AI) are two of the century’s most important innovations.
We discussed the correlation between the two of them in our article about the best 5g stocks to buy according to short sellers. Here is an excerpt from the article:
“In a CNBC interview at the Mobile World Congress Shanghai on June 26, director-general of the GSM Association, Mats Granryd highlighted the deep connection between 5G and AI and suggested that their mutual rise is not accidental. He said that “AI feeds off 5G and 5G feeds off AI.” This is especially evident in China, where the development of standalone 5G networks is well advanced and discussions are already shifting toward 5G Advanced (5.5G). While some countries lag, like the Philippines, Mats pointed out that this dynamic between 5G and AI is most prominent in regions with widespread 5G coverage…
…Mats believes that 5G will follow a similar path to become a common platform worldwide, which will also extend to AI. While some regions may advance faster than others initially, he showed confidence in the fact that everyone will eventually catch up and benefit from the integration of AI with 5G.”
The Outlook For 5G Industry
We also previously discussed the Market Research Future report which expects the 5G market to reach $229.41 billion by 2032, growing at a compound annual growth rate (CAGR) of 40.60% between 2024 and 2032.
According to a 5G Americas report, the wireless telecommunications sector continued to expand in the first quarter of 2024, driven by the widespread growth of 5G technology. Global 5G connections reached nearly two billion. North America’s leading adoption accounted for 32% of all 5G connections and added 22 million new connections, totaling 220 million. Latin America also experienced growth, with 8 million new LTE connections and 9 million 5G connections.
For the future, the 5G Americas forecast suggests that global 5G connections will reach 7.7 billion by 2028, with North America projected to have 700 million. The Internet of Things (IoT) is expected to further drive 5G adoption, with global IoT subscriptions expected to grow from 3.3 billion to 5 billion by 2028.
The Evolution of Mobile Networks with 5G Advanced and 6G
According to a March report by CNBC, telecom executives discussed plans for 5.5G or 5G Advanced at the Mobile World Congress in Barcelona, even as 5G is still being rolled out. The new stage of mobile technology is expected to enable advanced applications like mixed reality headsets, autonomous vehicles, and smart factories, which were initially promised with 5G.
The 5.5G technology will improve network capabilities by increasing data speeds and enhancing connectivity. It will also use AI to optimize networks and reduce power consumption. Huawei expects that 5.5G will begin commercial deployments by 2024, with the potential for much faster download speeds. The focus now is on improving 5G’s commercial relevance and paving the way for 6G in the future.
Moreover, a team of scientists, led by Professor Withawat Withayachumnankul from the University of Adelaide, has created a new polarisation multiplexer that could greatly improve 6G communications. The device works at terahertz frequencies, which are much faster than current wireless systems. It can send multiple data streams at the same time over the same frequency, effectively doubling the data capacity.
The multiplexer is built on a silicon base and has been successfully tested and reduces data loss compared to existing technology. The innovation could lead to faster, more reliable wireless networks and would benefit areas like telecommunications, video streaming, and future 6G mobile networks. The team expects it to drive more research and become available in commercial products within the next decade.
Our Methodology
To select the 10 worst 5G stocks according to short sellers, we used ETFs and screeners to identify over 40 stocks that have significant involvement in the 5G industry. Next, we narrowed our list to 10 stocks with the highest short interest. Finally, these stocks were ranked in ascending order of their short interest.
We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An assembly line in a semiconductor factory, with workers at their stations.
Marvell Technology, Inc. (NASDAQ:MRVL)
Short Interest as % of Shares Outstanding: 4.22%
Number of Hedge Fund Holders:
Marvell Technology, Inc. (NASDAQ:MRVL) is a prominent developer and manufacturer of semiconductors and related technology solutions. It is a notable name in the industry with a global footprint and over 10,000 patents. The company is known for driving technology innovations in several tech industries such as data infrastructure, 5G networks, cloud computing, and storage.
The company’s products range from data processing units (DPUs) and custom ASICs to security solutions and networking infrastructure processors. Its ThunderX and OCTEON series are deployed across important applications in cloud services, telecom, and automotive industries. Marvell’s (NASDAQ:MRVL) contributions to the semiconductor industry include collaborations with leading firms such as Microsoft Azure, Huawei, and Ericsson, to help drive 5G infrastructure and advanced cloud services.
The company’s 5G offerings include scalable, programmable, and high-performance silicon solutions that help carriers innovate sustainably. Its technology supports energy-efficient, cloud-optimized services with low total cost of ownership. The company collaborates closely with partners to ensure secure, reliable 5G connectivity for critical applications, from VR and AR to industrial automation.
Marvell’s (NASDAQ:MRVL) OCTEON 10 family features advanced 5nm baseband processors optimized for 5G and LTE-A networks. The OCTEON 10 Fusion baseband processor, known for low latency and high data rates, is designed for integrated and virtualized RAN architectures, with support for Massive MIMO and various radio frequencies. It offers programmability for future 5G enhancements and supports global 5G deployments.
It also provides 5G Open vRAN accelerators, which use PCIe card format for high-performance and cost-effective cloud-based RAN virtualization. The accelerators improve the capabilities of Open RAN and cloud ecosystems. Moreover, the company’s OCTEON 10 DPU family focuses on hyperscale cloud workloads, 5G transport, and edge inferencing, which offer significant compute power, energy efficiency, and integrated security features. The family supports high-speed interfaces like PCIe 5.0 and DDR5.
Marvell (NASDAQ:MRVL) ranks 6th on our list of worst 5G stocks to buy according to short sellers. Moreover, it was also a part of our September 10 article: 20 Worst Performing AI Stocks of Last Week, after declining 15.13% in the first week of September.
In the second quarter, the company’s stock was held by 74 hedge funds, at a combined value of $3.57 billion. Matrix Capital Management has been the company’s largest shareholder since the second quarter with over 15 million shares, worth $1.052 billion.
Artisan Partners stated the following regarding Marvell Technology, Inc. (NASDAQ:MRVL) in its Q2 2024 investor letter:
“During the quarter, we initiated new GardenSM positions in CCC Intelligent Solutions, Marvell Technology, Inc. (NASDAQ:MRVL) and Insmed. Marvell Technology is a semiconductor company offering networking, secure data processing and storage solutions to customers worldwide. We believe Marvell has among the broadest range of intellectual property in technological areas (e.g., high-bandwidth data switching and storage applications) that position it well for the growing requirements of data centers, wireless networks and autos. Several of the company’s product lines (e.g., custom silicon, optical connectivity and switching) are benefiting from the growth of AI data centers. And we believe a significant opportunity exists for the company to help design and manufacture cost-effective custom data center chips that would help cloud providers reduce their reliance on expensive graphics processing units (GPUs). Furthermore, like many other semiconductor companies, a portion of its business may be poised for a cyclical recovery after the industry’s recent inventory correction.”
Overall, MRVL ranks 6th on our list of 10 worst 5G stocks to buy according to short sellers. While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRVL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.