Chipmaker Marvell Beats Estimates, Calls AI 'A Key Growth Driver'
Chipmaker Marvell Technology beats Wall Street's targets for its fiscal first quarter and with its guidance. MRVL stock jumps.
Marvell Technology (MRVL), a chipmaker, beat Wall Street targets and provided a positive outlook for the first quarter of its fiscal year. MRVL's stock soared in extended trading, however, after the company cited artificial intelligence as a key growth driver.
Santa Clara, Calif. based company earned 31 cents per share adjusted on sales of $1.3 billion for the period ending April 29. FactSet polled analysts who expected earnings of 29c per share on sales $1.3 billion. Marvell's earnings dropped 40% year-over-year, while its sales fell 9%.
Marvell expects to earn 32 cents per share, adjusted for inflation, on sales of 1.33 billion dollars. This is based on its midpoint. Wall Street expected earnings of 30 cents per share on sales $1.31 billion for the second fiscal quarter.
In a press release, Chief Executive Matt Murphy stated that he expects revenue growth to accelerate during the second half of fiscal year. He also predicted an increase in gross and operating margins.
MRVL Stock Rises on AI Outlook
Murphy added that Marvell also expects to benefit from the growing investments in artificial-intelligence.
He said that "AI is a key driver of growth for Marvell. We enable this with our leading networking connectivity products and cloud-optimized semiconductor platform."
Murphy said, "While our AI ramp is still in its early stages, we expect our AI revenue to double in fiscal 2024 from the previous year and to continue growing rapidly in the future."
MRVL's stock jumped by 14.1% in after-hours trades on the stock exchange today to reach 56.43. MRVL's stock closed at 49.47 on Thursday during the regular session, up 7.6%.
According to IBD MarketSmith charts, MRVL is approaching a buying point of 49.58 from a cup's base.
Marvell manufactures networking and data storage chips used in cloud computing and communications applications.
According to IBD Stock Checkup, Marvell ranks 10th among 37 stocks in the fabless semiconductor group of IBD. MRVL has an IBD Composite rating of 83 out 99.