Marvell Technology (MRVL) remains under pressure amid investor concerns over its Application Specific Integrated Circuit, or ASIC, business, while peers such as Semtech (SMTC) and Ambarella (AMBA) are showing positive signs in data center and Internet of Things, or IoT, markets, ahead of delivering their quarterly results this week, Morgan Stanley said in a Tuesday report.

The analysts said investor expectations are lower after Marvell Technology narrowed its revenue guidance, causing concern, particularly around its ASIC business. There's optimism about continued growth with Amazon's (AMZN) Trainium chips, and potential upside from a new Microsoft (MSFT) AI chip, but details on both remain unclear. The analysts lowered their price target on Marvell to $70 from $90, due to "the broader AI trade re-rating, increased macro volatility, and more uncertainty regarding their ASIC prospects."

The analysts said Semtech has good exposure to the data center market, which they expect to show solid growth due to strong AI demand and a telecom rebound. However, the industrial segment, including IoT and Long Range, may decline due to seasonality. H2 remains uncertain due to tariffs and macro factors, but low distributor inventory could soften any demand slowdown, according to the note. The analysts raised their price target to $40 from $30, reflecting better sentiment in data center and an "improved" tariff outlook.

The analysts said Ambarella is set to have a stronger-than-usual H1 due to a solid IoT product cycle, although H2 is more uncertain due to geopolitical risks and tariffs. The company has struggled in the automotive segment, especially after losing a key L2 autonomy deal, and the automotive side is now expected to lag IoT, the analysts said. On the longer term, there's hope for future automotive wins, but recent developments have been disappointing, the analysts added. Morgan Stanley lowered its price target to $80 from $90, saying increased macroeconomic uncertainty and tariffs could disrupt its IoT business.

Price: 38.60, Change: +1.32, Percent Change: +3.54