Jim Cramer's full interview with Marvell Technology CEO Matt Murphy

[00:00:00] Speaker 1: what a crazy difference a week makes 70 days ago Marvell technology the semiconductor networking equipment maker you know I like it reported its latest quarter and after initial sell-off the stock soared in after hours trading as the forecast growth was huge the company made a terrific acquisition then reports emerged saying that they lost some chip business with Amazon web services might be losing more business from Microsoft I find this confusing the stock plunge 7% yesterday in the second another 3% days giving up these games I hope we can clear some of this up because the company's firing on all cylinders so let's dig deeper with Matt Murphy's the chairman CEO of Marvell technology to get a better read on the situation but smoke welcome back to Mad Money it's great to be back Jim on Mad Money thank you okay man I've never heard you be a more exciting and actually let's say more robust guidance than I've ever heard from you in terms of long-term growth what makes you so confident you [00:00:56] Matt Murphy: could pull us off well first of all Jim the track record we've established now in this AI cycle has been very strong think about it when I was here a year ago we were a less than six billion dollar revenue company this year we're going to end over 8 billion and where the street ended up for next year is 10 billion and actually where I guided everybody and we'll talk about that on a multi-year basis we see another 30% growth for the company in calendar 27 so we definitely have a multi-year view of where the business is headed but think about just this past year we grew the company over 40% look at all large semi companies in the last 12 [00:01:32] Speaker 1: months who's grown faster Nvidia that's about it now you made an acquisition that I thought was brilliant because we had spent a lot of time with Corning in Harrisburg Kentucky and I realized it's going to be fiber everywhere if possible this acquisition could position you fiber it scale up I may be able to be inside tell us about it because I it was it was really a shock to do analysts that you got [00:01:55] Matt Murphy: it yeah no it's first of all it's a company called Celestial AI it's a phenomenal company it's venture-backed startup in a very hot space which is exactly what you talked about which is in silicon photonics so their product is called a photonic fabric chiplet okay and what that does is it integrates the photonics and the fiber onto the chip and inside the data center so today the their silicon photonics technology used to connect data centers together but this actually is pioneering technology that's going to bring the technology inside the [00:02:28] Speaker 1: data center well this important because we keep hearing about miles and miles of copper in a data center copper will not work as the scale up and get bigger right [00:02:37] Matt Murphy: it's out it must be your stuff it's out of gas because there's a certain trace length or limit to the cable right and then at some point when you want to increase the bandwidth through the through copper you're gonna run out of gas so you actually need optical technology to do that now and you're the king of optical technology inside that's right because we started off if you remember a few years ago we acquired a company called in five which at the time people thought we were nuts right a 10 billion dollars for a company that was doing about 650 million in revenue that company now is doing over 3 billion in revenue four years later actually the revenue on that company now is bigger than the tam that we thought was available at that market so so that that's that this this is the next this is think of this is like in five but the next generation of technology and if I was for scale out this is for scale up that means [00:03:25] Speaker 1: connecting all the compute elements together the big money now I do want this is a great chance that there's an outfit called semi analysis they talked about how you had lost a design bake-off with AI chip for AWS's business you have a very close relationship with AWS then there's report yesterday the information about Microsoft and Broadcom converging to take some of your Microsoft business it is very difficult for any CEO to talk about clients it's almost it's stricken verboten as far as I'm concerned it's tough yeah at the same time when journalistic outfits say things right that are not true or won't prove to prove to be true and people sell stocks I get angry and I know that I know you as a man of honor for many many years can you at least give us a sense of do you need all these well these things that were mentioned knocked your forecast and your forecast is [00:04:17] Matt Murphy: already wrong right yes yeah I don't know what word to use could confused or astonished but let me just tell you what happened so as you said in your intro we announced our earnings last Tuesday stock performed very well after hours in the next day I think people love the messaging and and like you said I was very optimistic and very confident in the business not just next quarter not just next year but on a multi-year basis and actually laid it all out Jim this was the longest script and said it was long it took you a little while can I I ever did but I am for I did it for a reason right I did it so that I could get the transparency out there okay and so that was last Tuesday now somehow between last Tuesday and Friday somehow we lost it one article said we lost a huge piece of business which I had just said on Tuesday not only are we gonna deliver that next year I have the bookings thank you thank you I said I could not believe they could get away with writing that so so those orders are on the books that's done okay and then the other one was about again a potential lost piece of business in the world comes a tough competitor and what I would say is look we have deep key relationships with all the major US hyperscalers deep relations including a warrants situation with one that that's right at AWS and it was actually a year ago when I was on your show we and we had just announced that which was to buy AI custom products from us right networking products and then with the Celestial acquisition I don't know if you caught this but there was a an update to the warren agreement yes so we added silicon photonics and photonic fabric as a third swim lane to the to the warrants right and it's very clear in the conference [00:06:00] Speaker 1: because an analyst asked about it and you complimented the analyst for for noting this right because there's a lot of information in that quarter there was a lot that was you know my feeling is on this and you've got to correct me is you gave us a lot of info and it it was hard right it was dense yeah but at the same time it was about how close you are with customers that dad then I have to read the [00:06:22] Matt Murphy: next day that you're not close that's right so so I can tell you this from Tuesday to Friday nothing changed we [00:06:30] Speaker 1: didn't lose any business okay this stock has lost a dramatic amount of capitalization for no reason yeah now just let me give you another data point [00:06:42] Matt Murphy: just it's really the consternation and I get it is around that's why you're [00:06:46] Speaker 1: gutsy to come here people should know how hard it is to talk about the stuff he's talking about you're not supposed to right but you want a clear message up for [00:06:53] Matt Murphy: shareholders absolutely my shareholders and my employees and even my customers understand what we're going through they see it right they've all called call me about this stuff so here's the way to think about it the consternation is on these this custom silicon business the reason is there's there's lots of headlines on this right it's it's in the daily news cycle who's doing what so so so I guess there's there's money to be made but here's the deal on our custom business from calendar 23 to 24 that business quadrupled from Marvel right from calendar 24 to 25 that business doubled from Marvel we said for next year it's gonna grow 20 percent so it's got this huge steep ramp it's still gonna keep growing and then the year after it's gonna double again and I have total visibility to this okay and the reason let me tell you sure we talked earlier about communication circuits and interconnect right in in our company okay we think a lot about and it's it's an engineering term called signal to noise ratio signal to noise SNR and so here's the deal so in a in a in a communication system the signal is what you're trying to solve for right that gets that's data from point A to point B the noise is all the stuff in the system around it could be imperfections in the fiber could be heat could be noise so same thing in the stock market same thing with Marvel there's all this noise out there I am the signal I know what's going on I have the visibility I have the relationship with these customers and so our business is rock-solid in our data center right and nothing has changed since last Tuesday okay I will tell you that I [00:08:34] Speaker 1: had I think I had an identical discussion with you last time we had we had over a drink I said to you I can't believe your stock dropped this much it was like ridiculous right you said well you know I'm not and you said he's fine next thing I know I read you bought a huge amount of stock in the open market you you go by the filings you didn't tell me then you bought more now you are up substantially I know you don't flip and you can't flip no it's just another opportunity where you know Matt Murphy makes another statement by look I not only did I [00:09:03] Matt Murphy: buy-by no I'm talking about next last few days I know well what I'd say in over in general the silver lining is there's a massive opportunity right now to buy Marvel I mean look if you just look at where we trade today relative just to the semiconductor index we're trading below the average multiple and now we are not an average company we've had outsized growth we have huge prospects in our tie into the data center all the things we're doing I've never been in a more high momentum business environment Jim than right now I've done you a long time and I and you could money good think about money good the whole way think about this last three quarters Q2 record bookings Q3 record bookings Q4 quarter to date I've already booked more I've already had more bookings quarter to date than I did all of last quarter and the reason why is I laid in all that backlog and all those bookings for that piece of business that supposedly gone so anyway we can we can move off this but yeah [00:10:02] Speaker 1: you came on this show not for that the acquisition is great the numbers great but thank you for clarifying because you know that people can write whatever they want because there's no such thing as a journalism jail it's okay it's look it's a moment in time I get it it's a moment in time you bought a lot in the moment in time we'll see what happens this time that's Matt Murphy chairman CEO of Marvell MRBL I hope he got a lot out of it to me let's just say the truth will out and that money's back into [00:10:29] Speaker 3: the brink coming up AV is on the move after the bell and Kramer's getting the latest on the drone maker with big ties to the US military next don't miss a second of mad money follow at Jim Kramer on X have a question tweet Kramer hashtag mad mentions send Jim an email to mad money at CNBC.com or give us a call at 1-800-743-CNBC miss something head to mad money.cnbc.com