The Zhitong Finance App notes that Xianke Electronics (SMTC.US) and Maywell Technology (MRVL.US) will announce their respective quarterly results on August 25 and August 27, respectively. Although the valuation of these two stocks is “somewhat expensive” compared to historical multiples, UBS believes that the two are well positioned in the long term.
Regarding Xianke Electronics, UBS analyst TimothyArcuri believes that the company's data center business is likely to rise strongly again. Overall revenue is expected to approach the upper end of the guide range, while profits are higher than the midpoint.
Arcuri wrote in the report, “Looking ahead to the October quarter, we expect another significant jump in revenue, leading closer to the $370 million to $375 million range; we believe the final results will fall at the upper end of this range, driving earnings per share (EPS) to around $0.70.”
“Although management has always been conservative about data center growth — emphasizing expectations of 85% year-on-year growth in the second quarter and continued acceleration in demand for the rest of the year — we still believe that as hyperscale cloud service providers expand AI deployment volume and single-device content opportunities, the 2027 growth rate is more likely to break through 100% (our model is a 124% year-on-year increase). We also continue to see upside in the gross margin story, and recently indicated that as the company increasingly focuses on higher-value connectivity products, the divestment of the module business will bring favorable gross sales margin in FY2028.”
Arcuri reiterated its “buy” rating and target price of $225 for Xianke Electronics.
The situation is similar for Mwell, and UBS believes the company is expected to benefit from strong demand for optical communications and networking products.
Arcuri added, “Recent statements from hyperscale cloud service providers such as Google, Meta, and Amazon continue to point to higher AI infrastructure spending.” At the same time, as we emphasized in our recent Nvidia earnings preview, we believe Blackwell will continue to be strong and the Rubin platform will also accelerate. Given the optical communication content provided by Maywell within the Nvidia system, both of these will be beneficial to it.”
The analyst also pointed out that investors may have underestimated Mywell's custom ASIC business, particularly its collaboration with Microsoft (MSFT) — there are signs that the purchase volume may exceed 1 million units. Arcuri said that this may add 1 billion to 2 billion US dollars of revenue on top of the approximately 2 billion US dollars of revenue that Maywell has already given guidelines.
“We also want to highlight Maywell's CXL attachment program (CXL attachment program) at Google, which is gathering momentum. The average selling price (ASP) of a single chip is over $1,000 — this is another substantial tailwind, and the exact magnitude depends on the assumption of CXL's installation rate,” Arcuri explained. Finally, our views on the chip switching business have also become more positive: we now expect revenue from this business to be close to $1.2 billion for the 2027 calendar year, compared with management's previous expectations of around $1 billion.”