Why Nvidia’s GTC could be a negative for Marvell and other optical stocks

Why Nvidia’s GTC could be a negative for Marvell and other optical stocks

  • 17.03.2025 15:09
  • investing.com
  • Keywords: danger, danger

Nvidia’s GTC could negatively impact optical stocks including Marvell as new CPO tech may render current products obsolete.

Nvidia ProductsNVDAsentiment_dissatisfiedMRVLsentiment_dissatisfied
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Estimated market influence

Nvidia

Nvidia

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Nvidia's GTC event could negatively impact optical and networking stocks like Marvell.

Marvell

Marvell

Negativesentiment_dissatisfied
Analyst rating: Strong buy

Analysts expect negative implications for Marvell due to Nvidia's potential new CPO technology.

Context

Analysis: Why Nvidia’s GTC Could Impact Optical Stocks

Key Facts and Data

  • Event Date: NVIDIA's GTC event kicks off on March 18, 2023.
  • Expected Announcements:
    • Launch of co-packaged optics (CPO) technology.
    • New ethernet and Infiniband-based switch products.
  • Analyst Opinions:
    • Mizuho TMT specialist Jordan Klein expects significant impact on optical and networking stocks.
    • KeyBanc analyst John Vinh describes CPO as "new interconnects" to overcome bandwidth limits.

Market Impact

  • Negative Implications:
    • Marvell (MRVL): Anticipated to face pressure due to NVIDIA's new technology.
    • Lumentum (LITE) and Coherent Inc. (COHR): Expected to see downward pressure on optical transceivers.
    • Arista Networks (ANET): At risk of losing hyperscale cloud market share.
  • Positive Implications:
    • Fabrinet (FABR): Seen as a potential winner in contract manufacturing for NVIDIA's new products.

Competitive Dynamics

  • Winners:
    • Fabrinet (FABR) likely to benefit from manufacturing deals with NVIDIA.
    • LitePoint (LITE) and Cradlepoint (CRDO) seen as long-term optical and connectivity plays.
  • Losers:
    • Marvell (MRVL), Lumentum (LITE), and Coherent Inc. (COHR) at risk due to NVIDIA's advancements.

Long-Term Effects

  • Industry Shift: CPO technology could redefine interconnect solutions, potentially altering market dynamics.
  • Regulatory Considerations: No immediate regulatory impacts noted in the analysis.

Analyst Sentiment

  • Klein:
    • Bears: MRVL and AMD (AMD) most at risk.
    • Bulls: LITE and CRDO as long-term plays.
    • Fabrinet (FABR) seen as a mid-year winner.
  • Vinh: Sees NVIDIA's CPO as a significant advancement but notes risks for competitors.

Stock Volatility

  • Anticipated high volatility in optical and networking stocks, with MRVL, LITE, CRDO, COHR, MTSI, ALAB, and SMTC expected to see movement.

Conclusion

NVIDIA's GTC event is poised to reshape the optical and networking landscape, with immediate impacts on competitors like Marvell and long-term implications for the industry. Investors should closely monitor stock movements and analyst reactions post-event.