Marvell Technology's (MRVL) Q4 results are expected to exceed estimates, driven by strong demand for artificial intelligence networking and application-specific integrated circuits, Oppenheimer said in an earnings preview Tuesday.

The firm projects AI application-specific integrated circuits sales to top $3 billion this year due to key product introductions and partnerships, such as Amazon Web Services Trainium, advanced products and high-speed networking solutions.

Enterprise networking and carrier segments, which bottomed in H1 2024, are expected to grow about 15% in Q4. Oppenheimer noted that the combined legacy revenue run-rate has more than doubled from under $1 billion last year to over $2 billion, partially aided by management's strategy of under-shipping to end demand.

The automotive and industrial segment is rebounding after a year-long inventory correction, with expected sequential growth in Q4, driven by in-vehicle Ethernet connectivity.

Meanwhile, the consumer segment, which accounts for 5% of revenue, is experiencing seasonal weakness tied to console cycles and is projected to decline 15% sequentially in Q4. However, it is expected to bottom in Q1 and begin recovering in Q2, according to the note.

Oppenheimer reiterate outperform rating on Marvell's stock with a price target of $125.

Price: 91.95, Change: -5.97, Percent Change: -6.09