This post was originally published on this sitehttps://i-invdn-com.akamaized.net/news/Computer-(tech-sector)3_M_1440049439.jpg
Investing.com – Marvell Technology surged on Monday as Wells Fargo WFC 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 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%.
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.