Marvell Technology’s shares surged to a record high on Wednesday, reaching $118 as the company surpassed a market capitalization of $100 billion for the first time. The semiconductor firm’s strong earnings report and expansion with Amazon on cloud software and hardware were key drivers of the surge.
Marvell’s third-quarter revenue of $1.52 billion exceeded analyst projections of $1.45 billion, while adjusted earnings per share rose to $0.43 from $0.41. The company raised its fourth-quarter guidance, citing an increase in AI demand that would result in revenue between $1.71 billion and $1.89 billion.
Amazon expanded its partnership with Marvell on Monday, committing to a five-year deal for the semiconductor firm to supply data center semiconductors, including custom AI products, to reduce costs. This move positions Marvell as a unique alternative to Nvidia in the AI market.
Analysts at UBS predict Marvell’s AI revenue could reach $3.6 billion by 2025, outpacing the company’s target of $2.5 billion. Meanwhile, Nvidia’s shares rose by 3.7% on Wednesday despite facing competition from Marvell. The gap between Amazon’s spending on Nvidia and Marvell chips narrowed significantly, with Amazon reportedly spending more than $20 billion on Nvidia’s chips compared to $1-2 billion on Marvell’s.
As demand for advanced AI chips grows, Marvell has attracted attention from tech giants like Google and Microsoft. The company’s CEO, Matt Murphy, recently declined a potential offer from Intel to become the chipmaker’s next CEO.
Source: https://www.forbes.com/sites/tylerroush/2024/12/04/marvell-technology-reaches-100-billion-valuation-after-earnings-beat-and-amazon-deal