12:19 PM EDT, 05/31/2024 (MT Newswires) -- Marvell Technology's ( MRVL ) primary growth driver continues to be artificial intelligence, with the focus still on optical and custom silicon as networking and other markets remain soft, Morgan Stanley said in a note to clients Friday.

The investment bank said it is now more bullish on the company's growth because of the AI surge and Marvell's ( MRVL ) "strong position," especially in optical.

"We have considerably more enthusiasm for optical, where the company has worked through a minor inventory correction and seems likely to drive sustained growth from here," the firm said in the note, adding it expects Marvell ( MRVL ) to sharply ramp up custom silicon projects this year, but sees risk from Nvidia's ( NVDA ) "accelerated cadence."

For the July quarter, Morgan Stanley said it updated its estimates and now expects Marvell ( MRVL ) to post revenue of $1.254 billion and earnings per share of $0.29.

The firm lifted its price target on Marvell Technology ( MRVL ) to $77 from $71 and maintained its equalweight rating.

The company's shares were down 11% in recent trading.

Price: 68.32, Change: -8.53, Percent Change: -11.10