Stocks

Marvell Technology Stock Soars After Strong Earnings Report

Published December 4, 2024

Shares of Marvell Technology (NASDAQ: MRVL) experienced a significant increase today following the release of the company’s third-quarter earnings report. This report revealed results that exceeded expectations, primarily boosted by strong demand for AI technology and favorable guidance.

As of 1:03 p.m. ET, the stock was up approximately 23.6% in response to the news.

Marvell Exceeds Expectations

While the year-over-year revenue growth for Marvell remains modest due to a previous slowdown in the semiconductor sector, the company successfully surpassed revenue expectations in the latest quarter.

During this quarter, Marvell reported a revenue growth of 7% year-over-year, reaching $1.52 billion, which also represented a 19% increase from the prior quarter. This figure exceeded analysts' expectations, which estimated revenue at $1.46 billion, in addition to the company’s own guidance.

Regarding profitability, adjusted earnings per share rose from $0.30 to $0.43, surpassing the consensus estimate of $0.41. Marvell, a fabless semiconductor firm well-known for its custom chips, networking chips, and storage solutions, noted an upturn in momentum. CEO Matt Murphy emphasized, "We are forecasting another 19% sequential revenue growth at the midpoint of guidance, while year-over-year, we expect revenue growth to accelerate significantly to 26%, marking the beginning of a new growth phase for Marvell." He highlighted that this robust performance is largely driven by "custom AI silicon programs."

Additionally, Murphy was reportedly among the candidates considered for the CEO position at Intel, though he reaffirmed his commitment to Marvell.

Looking Ahead for Marvell

The guidance provided by Marvell's management appears to have significantly influenced the stock's rally. For the fourth quarter, the company forecasts revenue between $1.71 billion and $1.89 billion, marking a 26% increase at the midpoint. Adjusted earnings per share are expected to fall between $0.54 and $0.64, which is above the current estimate of $0.52.

The accelerating revenue growth, alongside increasing demand for AI technology, positions Marvell favorably as it prepares to harness opportunities presented by the burgeoning AI market.

Disclaimer: Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel. The Motley Fool also recommends Marvell Technology and suggests shorting February 2025 $27 calls on Intel. A disclosure policy applies.

Marvell, Earnings, Stocks