Marvell shares jump as AI chip demand drives strong outlook

Shares of Marvell Technology surged nearly 12% in premarket trading Friday after the chipmaker projected strong multi-year growth fueled by booming demand for artificial-intelligence infrastructure.

The company said it expects revenue to reach about $15 billion by fiscal 2028, representing roughly 40% growth and exceeding analysts’ average estimate of $12.92 billion, according to LSEG data. Marvell also raised its fiscal 2027 outlook, forecasting more than 30% year-over-year growth to nearly $11 billion, News.Az reports, citing Reuters.

Investor enthusiasm comes as spending on AI chips accelerates across the semiconductor industry. Earlier this week, Broadcom projected over $100 billion in AI chip sales next year, highlighting how demand is expanding beyond leaders such as Nvidia.

Massive investments by major tech companies are helping fuel the surge. Capital spending on AI infrastructure by Alphabet, Meta Platforms, Microsoft, and Amazon is expected to exceed $630 billion this year, increasing demand for Marvell’s custom chips and high-speed interconnect technologies used in AI data centers.

Marvell specializes in application-specific integrated circuits (ASICs)—chips designed for specific workloads that can deliver higher efficiency than general-purpose processors. Analysts say rising use of custom AI processors and optical networking technology in hyperscale data centers could drive strong growth for the company over the next several years.

For the current quarter, Marvell expects revenue of about $2.40 billion, above analysts’ estimates of $2.27 billion, supported by contributions from newly acquired Celestial AI and XConn Technologies.

Despite the rally, Marvell trades at a forward price-to-earnings ratio of about 20, lower than Broadcom’s roughly 25, suggesting potential upside if demand for AI infrastructure continues to expand.

News.Az 

By Aysel Mammadzada